Good evening and welcome to Universal Music Group's Second Quarter and First Half Earnings Call for the Period Ended June 30, 2025. My name is Drew, and I will be your conference operator today. Your speakers for today's call will be Sir Lucian Grainge, Chairman and CEO of Universal Music Group, and Boyd Muir, Chief Operating Officer. They will be joined during Q&A by Michael Nash, Chief Digital Officer, and Matt Ellis, Chief Financial Officer. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number 2. As a reminder, this call is being recorded. Please also let me remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may vary in a material way. For a discussion of some of the factors that could cause actual results to differ from expected results, please see the Risk Factors section of UMG's 2024 Annual Report, which is available on the Investor Relations page of UMG's website at universalmusic.com. Management's commentary will also refer to non-IFRS measures on today's call. Reconciliations are available in the Interim Financial Review and unaudited, condensed, consolidated Interim Financial Statements for the six-month period ended June 30, 2025, on the Investor Relations page of UMG's website. Thank you, Sir Lucian. You may begin your conference. Thank you, and greetings to everyone from us here in Hilversum. As you've now had an opportunity to see, UMG's string of strong financial results continued for both the second quarter and the first six months of the year. For the first half year, revenue is up 7%, and adjusted EBITDA is up 8.5%. Before Boyd goes into the numbers in greater depth, I want to take a few minutes to walk you through a few achievements of which we're justifiably proud, namely the extraordinary commercial and creative successes that our artists and songwriters continue to achieve around the world, and the ongoing progress we're making on the strategic evolution of our company, driving growth, pursuing new opportunities, and creating greater efficiencies. I'll start with the artists' successes. Put very simply, we provide the global platform, the expertise, and the resources to support and deliver our artists' historic success. Everything we do is fueled by an entrepreneurial culture that is music-driven and artist-centric. It's a culture that is attuned to change and forever innovating artistically, commercially, and technologically. Here are just a handful of examples of what that culture has recently achieved in partnership with our artists. In the U.S., for the year so far, UMG had eight of the top 10 best-selling albums, with Morgan Wallen at number one, and Universal Music Publishing Group songwriters were represented in all 10 of these albums. Of the biggest-selling album debuts this year, UMG represented the top six, with the top five being Morgan Wallen, The Weeknd, Playboi Carti, Drake, and Party Next Door, as well as Lady Gaga. We also had all of the top six most-streamed tracks for the first half of the year, including three from Kendrick Lamar, who had the number one song, as well as tracks by Lady Gaga and Bruno Mars, Drake, and Morgan Wallen. UMPG had eight of the top 10 tracks on this same chart. Not only did Morgan Wallen have the number one album in the U.S. for the first half of the year, but he also held the number one spot on the Billboard 200 for the entire first two months. In the history of the Billboard 200 chart, the only male artists who have spent more weeks at number one than Morgan are Elvis Presley, Garth Brooks, Michael Jackson, and Sir Elton John. Not a bad group to be immediately ahead of. Another exciting US success for us so far this year is the soundtrack of the animated Netflix fantasy musical K-pop Demon Hunters. According to Netflix, the film has already achieved 80 million views, making it one of the biggest animated films ever. The soundtrack, released under a new Republic Records joint venture with Vesper, is the highest-charting soundtrack of the year, and the single recently hit number one on the global chart. Speaking of global, let me take you now on a brief spin around the globe. First, Japan, the world's second-largest music market by revenue. The continued success there of the band Mrs. GREEN APPLE is truly historic. Mrs. GREEN APPLE is now the first J-pop act in history whose catalog has exceeded 10 billion total streams in Japan. For the first half of the year, they've held the number one spot on each of Billboard Japan's Artist, Album, and Song charts. With Seventeen, &TEAM, Hyphen, and King & Prince, Universal Music Japan also had four of the top 10 on the Oricon Albums Chart, the local key indicator. Moving over to Europe, in the U.K., UMG had six of the top 10 albums for the half year, with Sabrina Carpenter at number one and Sam Fender at number three. Sam's album is the U.K.'s biggest new album of 2025, the fastest-selling album by a British artist in the last three years, and the fastest-selling vinyl album of the century. On the U.K. Singles chart, UMG had seven of the top 10, with the breakout Lola Young, Gracie Abrams, and Chappell Roan all in the top five. In Germany, we had seven of the top 10 albums with Billie Eilish, Lady Gaga, and The Weeknd all in the top five, and our local artist Omara had the number one single. Here in the Netherlands, where we are today, UMG had three of the top five albums and five of the top 10 singles, including two from local artists, Frenna and Lust from UBSV. In France, UMG had the two biggest breakout artists of the year so far, with Theodora and L2B Gang. Finally, in China, our continued strategic investment in our frontline business in that country continues to bear fruit. Universal Music Greater China signed a new partnership with Mandopop artist David Tao and his company, Great Entertainment. Over the past three decades, David, who is considered the godfather of Mandarin R&B, has played a key role in redefining the sound of Mandarin pop. Also in China, we took a meaningful step forward in growing our multi-label operations there with the launch of Deutsche Grammophon China and Blue Note Records China, the latest expansion of two of the most iconic and influential labels in classics and jazz. You can see the breadth, the blend throughout the world of our international artists, our global artists, as well as the domestic talents that we've invested in over the years and most recently. I'd like to shift now to the second topic I want to cover, the steps we keep taking to advance our long-term strategy. First, health and wellness. Increasingly, scientific research supports what we've intuitively known all along, that music is a powerful force for healing and well-being. For nearly a decade, our company has been a leader in promoting health and wellness advancements in the music space, whether that's FDA-approved prescription digital therapeutics or employing music to support treatments for dementia, anxiety, and more. When I say UMG is a leader, I'd like to be clear about two things. First, because music's presence in the health and wellness space is still in its embryonic stage, we see a great deal of upside in tapping into music's potential in the growing field. Secondly, while we, of course, license our artist music, we've also been developing our own health and wellness-related technology as well. Just over two months ago, that homegrown technology of ours was validated in a very big way. In May, one of the largest and most innovative technology companies in the world, Apple, in a first-of-its-kind partnership, introduced the Sound Therapy collection, an innovative audio wellness collection designed to help listeners attain clearer focus, deeper relaxation, and better sleep. Available exclusively on Apple Music, the Sound Therapy collection blends songs as a subscriber already knows and loves with scientifically calibrated sound waves designed to enhance the listener's daily routines whilst retaining the artist's original vision. Powered by UMG's proprietary audio technologies, including our own ethically developed patented Gen AI system, the collection has been crafted by a team of producers, scientists, and audio engineers at Solace, a groundbreaking music wellness venture incubated, developed, and owned by UMG. The technology that is serving as the underpinning of the Sound Therapy collection is not the only technological innovation we've built in-house that harnesses AI. Since 2020, we've been hard at work to bring our expertise to bear on numerous applications that employ artificial intelligence to support artist marketing, analytics, and obviously distribution. To accelerate and scale the development of our patents, we recently partnered with Liquidax Capital, an IP asset management investing advisory firm. Under the partnership, they will support UMG's efforts filing patent applications and licensing our technological inventions. Our greatly expanded patent portfolio can then become a catalyst to accelerate the introduction of products to the marketplace. Liquidax, on our behalf, has already filed 15 patents in the fields of musical collaboration, multimedia content, and campaign creation, AI threat protection, music administration, and rights management. With our industry-leading track record of consistently developing the most successful artists in the world, quarter after quarter, year after year, we're also taking advantage of some of the many opportunities around extending our label and artist brands into new realms. Take, for example, our investment in virtual artist experiences such as ABBA Voyage or our experiential hospitality venture, UMusic Hotels. These are capital-light investments that expand our artists and label brands, support our e-commerce and D2C strategies, and create powerful commercial ecosystems around our artists, as well as deeper experiences for fans. That strategy of brand extension is at the heart of our recently announced venture with WTSL, the Silver Lake-backed investment firm founded by longtime entertainment leader Patrick Weitzel. The venture will accelerate our ability to unlock opportunities that extend music's value across film, television, fashion, consumer brands, branded experiences, and other emerging growth areas. Combining our strategic expertise and networks, the two companies will capitalize on how cultural influence is leveraged, making artists and their music the foundations for building scalable, multidimensional businesses that connect with audiences in a new, lasting way. Of course, even as we grow and expand, we always remain laser-focused on our cost base, exploring and instituting new ways to improve efficiency. To that end, I'm pleased to report that after having achieved €125 million in cost savings from the phase one of our strategic redesign, we are on track on the second phase of our plan. Amongst a number of strategic areas, this phase has included reorganization of our UK company, which subsequently has had its best domestic artist success in many years with Sam Fender, Lola Young, and Olivia Dean, to name just a few. Our D2C and e-commerce functions, which now have greater integration with our frontline labels to achieve more streamlined decision-making and impactful artist and catalog campaign. Thirdly, our IT organization to leverage AI and other technologies to drive greater efficiencies and improve support of all our business units. We are working at a tilt to integrate all of this within all areas and all structures and all markets of the company worldwide, how we integrate our AI, how we use it, and how we adapt alongside our artists to something that we see as a great opportunity and very positively. Our long-term strategy continues to be remarkably effective. UMG has evolved far beyond the old definition of a music company. We have become a dynamic global enterprise, constantly evolving and reinventing itself. Whether in our core businesses of recorded music and music publishing or in emerging fields such as health and wellness, AI, or brand extension, UMG is a hub of creative innovation, and that's how we have to be. All our efforts share the same purpose and goal to help support our artists, their music, and their brands. One last thing I'd like to add. Last week, we received notice that we've entered phase two of the European Commission's review of Virgin's acquisition of Downtown. Because the combined company will help support the growth and success of independent labels and their artists everywhere in what is a very highly competitive artist services space with more than 100 companies, we remain confident that the transaction will pass that review and will be completed before the end of the year. I think now I'd like to turn things over to Boyd, who after today will be handing over to Matt Ellis, our new CFO, the responsibility for reporting the financials on our next earnings calls. For today, Matt will be joining us for the Q&A and is here with us in Amsterdam. If you will, for this one last time, please savor the dulcet tones of Boyd's Scottish accent and his brogue as he walks us through the financials. Also, please welcome Matt Ellis as he joins our band. Thank you. Lucian, thank you very much. Here is the dulcet tones about to go. The second quarter marked another quarter of solid constant currency revenue growth, adjusted EBITDA growth, and margin expansion for UMG. We are pleased with the strong growth in subscription. Supported music publishing revenue, which more than offsets particularly difficult comparisons in physical and merchandising revenue. This quarter's revenue composition once again reflects the breadth of our business and supports our conviction about our ability to deliver constant, healthy growth. In the quarter, revenue grew 4.5%. Adjusted EBITDA grew 7.3%, and adjusted EBITDA margins expanded 60 basis points to 22.7%. In terms of the difference between EBITDA and adjusted EBITDA, we had €53 million in non-cash share-based compensation expense for the quarter, as well as €12 million in U.S. listing preparation costs and certain M&A advisory costs, compared to €69 million in non-cash share-based compensation expense in the prior year quarter. For the half year, revenue was up 6.9%, and adjusted EBITDA grew 8.5%, driving margin expansion of 30 basis points to 22.7%. Total adjusted EBITDA margin reflects 70 basis points of margin expansion in recorded music and a decline in corporate overhead, partially offset by margin contraction in music publishing and merchandising, which I will come to when I discuss each segment. The first half of the year had a total of €110 million in non-cash share-based compensation expense compared to €171 million in the first half of 2024. We continue to expect about €230 million in non-cash share-based compensation expense this year. Earnings per share for the first half of 2025 grew to €0.78, up from €0.50, and adjusted diluted earnings per share grew to €0.48, up from €0.44 in the first half of 2024. Now let me turn to the segments. Recorded music revenue grew 3.9% for the quarter and 7% for the half year. This revenue growth drove adjusted EBITDA up 9.9% for the first half, and adjusted EBITDA margin expanded 70 basis points to 26.1% for the half year. The margin expansion was driven by a combination of cost savings, revenue mix, and operating leverage. Looking further at recorded music revenue, subscription revenue grew 8.5% in the quarter, largely similar to our results for the last several quarters. This growth continues to be driven primarily by growth in the number of subscribers and, to a much lesser extent, certain price increases, with a small drag this quarter from a decline in fitness platform revenue. Similar to last year, this quarter's subscription growth was supported by solid growth in high RPU established markets, including the U.S. and Japan. The quarter's performance was also driven by double-digit growth in other top 10 markets, including Mexico and Brazil. Given that Luminate's mid-year data shows that these two markets are now the third and fourth largest markets globally for total streaming consumption, we're particularly pleased to see double-digit paid subscription growth. For the half year, subscription revenue grew 8.9%. We've now reported four consecutive quarters of high single-digit subscription revenue growth, the last three quarters of growth being primarily volume-driven. We have posted these results prior to realizing the impact of improved monetization from our Streaming 2.0 partnerships. Ad-supported streaming revenue growth accelerated this quarter, increasing 9.1% as comps eased, and we saw modest incremental improvements in account performance and monetization across most of our major partnerships. The sequential improvement in year-over-year growth was substantially supported by an easier comp as we partially anniversaried the loss of a premium music video license with Meta and also comped against a month of being off-platform with TikTok in the second quarter of 2024. For the half year, ad-supported streaming revenue grew 4.6%, which should give you a more normalized view of how our ad revenue is performing. Going forward, we expect this revenue to remain challenged in the near term by the shift to short-form consumption, which is not yet adequately monetized. There is continued uncertainty in the overall macro environment. Downloads and other digital revenue grew 50% thanks to a settlement with an internet service provider. As you know, these smaller settlements happen regularly in our normal course of business. In this instance, it amounted to €31 million of revenue and €15 million of EBITDA. For the half year, downloads and other digital revenue was up 17.2%. Moving now to physical. As expected, physical revenue declined 12.4% in the quarter, with the U.S. and Europe down against last year's release of Taylor Swift's The Tortured Poets Department. Physical sales in Japan grew strongly in the quarter, driven by several local releases. For the half year, physical revenues were largely flat, and we continue to expect physical sales for the year to be relatively flat given the difficult comp. Beyond that, we remain excited about the physical revenue opportunity driven by vinyl and other collectibles, reflecting an important component of the opportunity around super fandom. Licensing and other revenue had a timing-related decline of 6.5% in the quarter, also as a result of a difficult comp, as last year included improvements in live and audiovisual revenues. For the half year, licensing and other revenue grew 8.6%. Now turning to music publishing, revenue grew 14.5% in the quarter, with strength across digital, performance, and sync revenues, thanks to the remarkable performance of our songwriters. The strong growth also reflects the card administration business, as well as our continued success in growing our film and TV administration business. For the half year, music publishing revenue grew 12.1%, and music publishing adjusted EBITDA grew 7.9% as margin declined 90 basis points as a result of revenue and repertoire mix. Turning now to merchandising, as expected, merchandising revenue declined against last year's extremely strong growth, which was helped by direct-to-consumer sales tied to Taylor Swift's album release and tour. This quarter, merchandising revenue declined 12.7%. For the half year, merchandising revenue fell 10%, or €36 million year-over-year, while adjusted EBITDA declined €21 million to negative €3 million. The loss is a result of lower revenue and higher manufacturing and freight costs. The higher manufacturing and freight costs were due partly to product mix, as well as higher tariffs, which drove a need to find quick solutions for alternative manufacturing. We're taking several steps to improve the profitability of our merchandising business, including investing in our D2C business and working on ways to reconfigure our manufacturing supply chain. As we've previously mentioned, this is the only area of our business impacted by tariffs. Net profit for the first half of 2025 amounted to €1.4 billion, compared to €914 million in the first half of 2024, resulting in earnings per share of €0.78, compared to €0.50 in the first half of 2024. The increase in net profit includes a €1.1 billion increase in the valuation of investments in listed companies, compared to an increase of €565 million in the first half of 2024, which was partly offset by the related increase in deferred tax expense. Net profit also included the €110 million of share-based compensation expense in the first half of 2025, compared to €171 million in the first half of 2024. In addition, net profit reflects restructuring costs of €49 million in the first half of 2025, related to our strategic organizational redesign, as well as €12 million of costs related to our planned U.S. listing, certain M&A advisory costs, compared to €113 million of restructuring costs in the first half of 2024. Adjusted net profit, which adjusts for, amongst other items, the revaluation of investments, the share-based compensation expense, restructuring costs, and the listing and M&A costs I just mentioned, grew 9% to €882 million in the first half of 2025, resulting in adjusted earnings per share of €0.48 compared to €0.44 in the first half of 2024. In line with our commitment to pay a dividend of at least 50% of our net profits, the interim dividend for 2025 will be €440 million, or €0.24 per share. As we've seen discussed, we have begun to implement phase two of our strategic organizational redesign, which we first introduced to you in early 2024. We continue to remodel our organization to enhance our capabilities in the areas most critical to our future growth and success. These changes are strengthening our leadership team, fostering innovation, and creating efficiencies across our business. As a reminder, the overall plan will generate €250 million in run-rate cost savings and will be implemented by the end of 2026, as expected. We completed phase one of the program in 2024, which resulted in €125 million of run-rate cost savings, €75 million of which was realized in 2024, with the incremental €50 million realized in the first half of 2025. In late 2024 and early 2025, we commenced our work on implementing phase two of the program. You heard Sir Lucian Grainge speak about some of the areas which we are improving our operations. The key areas that we have been addressing as part of phase two of the plan include our direct-to-consumer business, our catalog business, activities in our international operating companies, including the U.K. and Europe, and central corporate functions such as technology, supply chain, and data and analytics. I'm pleased to announce that phase two is on track and is expected to lead to an additional €40 million of realized cost savings in the back half of 2025, bringing the total 2025 realized cost savings to €90 million. The phase two actions already taken during 2025, combined with additional actions to be taken in 2025 and 2026, are expected to generate an incremental €85 million of realized savings over 2026 and 2027. In 2025, we expect to incur total restructuring charges of about €95 million, of which €49 million fell into the first half of the year. Now let me turn to cash flow. Our net cash provided by operating activities before income taxes paid for the first half of 2025 increased 11.9% to €488 million. This improvement is driven by the strong growth in operating profit, partially offset by an increase in net royalty advance payments, which amounted to €377 million, up from €315 million in the first half of 2024. This increase was due to the timing of certain major artist deal renewals and extensions, including in music publishing. In addition, the increase in net cash provided by operating activities was also offset by the €61 million in cash restructuring related to the organizational redesigns. Net cash provided by operating activities also reflected €95 million that we paid to settle employee tax liabilities arising from equity plan grants and associated obligations. You'll recall that for the past three years, we've opted to fund the taxes with cash rather than issue shares, which reduces the dilutive impact of the grants. In total, we have used €420 million in cash to fund these taxes over the past three years, which has lessened shareholder dilution by just under 1%. Even with the increase in royalty advances and the payments made to cover employee tax obligations, free cash flow before investing activities was €143 million in the first half of 2025. Let me remind you, the second half of the year is a consistently stronger cash-generating period for our business. We also continued our long-term strategic investment into the business. We paid €149 million for catalog acquisitions in the period, although about half of which are catalogs that will be moved into the Cord vehicle in the coming months. Cord is successfully raising capital and building a strong deal pipeline. The structure is working exactly as we envisaged, enabling us to move quickly to acquire high-quality catalogs without significant capital allocation over time. To maintain our share of ownership in the vehicle, we also made a €30 million incremental equity investment into the business in the first half of the year. This is included in our other investing activities, which totaled €173 million, and also included a number of additional strategic investments, such as our majority stake in A-Sketch in Japan. Free cash flow in the first half improved to an outflow of €179 million, compared to an outflow of €460 million in the first half of 2024. We encourage you to look at cash generation on a full-year basis rather than for a half year, as working capital movements and the timing of investments can vary considerably during a shorter time frame. We remain excited and encouraged by the path ahead of us. With an expanding ecosystem and market opportunity, we continue to be an invaluable partner to our artists, whose music is an ever more vital component of a growing number of platforms and businesses. Before I close, let me note that on July 21, we announced that we had confidentially submitted a draft registration statement to the SEC relating to a proposed U.S. public offering of our ordinary shares held by certain shareholders. Due to U.S. securities rules, we're unable to provide any further details at this time, but we look forward to sharing additional information when we are able to. Thank you. With that, Sir Lucian Grainge, Michael Nash, Matt Ellis, and I will now take your questions. Operator, please open the line for Q&A. Thank you. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number two. We ask that you please limit yourself to two questions. Our first question comes from the line of Jason Bazinet from Citigroup. Your line is now open. Please go ahead. I just have one question. You all mentioned that the 2.0 partnerships were not part of the results that you've put up so far. How optimistic are you in the next 12 months that you're looking to see some benefit from that? What are your feelings? Thank you. Jason, thank you for your question. You were breaking up a little bit. If I can rephrase and please correct if we got your question wrong. Your question was regarding the fact that we had stated that our growth did not yet reflect the significant benefits from the 2.0 deals that we announced, and you wanted to know the timing of when the 2.0 deal benefits would kick in. We're obviously not going to get into confidential details regarding those deals when we announced the Spotify and the Amazon Music deals. At the end of December and in January, we talked about their 2.0 characteristics. You can tie that back to the definition that we gave of 2.0 on Capital Markets Day in September, where we talked about the different components that would contribute to growth. I think that the best way to gauge the impact of those deals is to consider our midterm guidance that we've provided of 8% to 10% subscription growth in the midterm. We expect our Streaming 2.0 deals to significantly contribute to our achievement of that guidance. As Boyd said in his comments, the benefits that we're going to realize from those deals are not yet included in our results. Our next question comes from Ed Young from Morgan Stanley. Your line is now open. Please go ahead. Thank you. My first question is on Super Premium tiers. In its recent Q2 call, Spotify peers talked down prospects for that in the near term. Are you confident that other digital service provider partners may still do so this year, or is this perhaps going to be a somewhat slower process to pull products together? My second question is on AI. The company has obviously made very good progress signing principled AI fair use agreements with many of its partners and counterparties, but the legal protection backdrop in the U.S. and the EU, if we take the recent AI code of practice, for instance, does appear weaker than it did, say, maybe 12 months ago. How do you see the prospects for UMG as a rights holder for your artists, obviously, with the balance of the specific agreements you've got with partners to protect versus the sort of general legislative and legal direction of travel? Thanks. Ed, thank you for your question. Regarding the question on Super Premium tiers, in terms of the breadth of our conversations generally, we're deeply engaged with all of our key partners, including Spotify, on what we view as a very important category of opportunity. We're encouraged by the direction of those conversations. These partners have product roadmaps and business development requirements around execution, which impact their timing. We hope to be able to publicly elaborate on these collaborations' plans in the coming quarters. With respect to your reference to Spotify and their comments, we were encouraged to hear Spotify executives' comments on this week's earnings calls about their excitement regarding engaging super fans and confirmation that they're "building something great for them." We appreciate their commitment to what they've described as very high value standards for such product releases. That is, of course, what we want to see in the marketplace as well. We understand the things they cited in terms of product and business development that do take time. We also certainly agree with Spotify executives that there's a big opportunity to monetize more valuable customers, and we're encouraged to hear them say that they "see great demand from different super fan segments." It's important to point out that a very successful super premium tier has now been in the market for over a year, launched by one of the world's leading music platforms, Tencent Music. The empirical data is impressive. We were very encouraged to hear in May on their earnings call, Tencent Music's earnings call, the growing success of their SVIP tier, which they credited with playing a very significant role in elevating their ARPU and thus driving revenue growth to 16.6% year over year at twice the rate of increased subscriber growth, 8.3%. So 16.6% compared to 8.3%. They said that the most substantial contributor to that growth was implementation of the SVIP tier. We see this as a very strong validation for our position. Note that they previously indicated low teens percentage penetration, so I think 13%. You're talking about 120 million subscribers. That's 15 million SVIP subscribers. I'm just extrapolating math. I'm not disclosing any confidential information, but just based on their public statements. That's at 5X the standard tier pricing in a market that is widely regarded as being one of the most difficult in the past to monetize. We see the empirical data from Tencent Music and their SVIP tier as a great indicator of the scope of opportunity. We've said before, more than 20% of subscribers is our target globally at 2X the price point ultimately. This level of consumer demand that we're seeing in the research and that we've seen empirically demonstrated, the innovation potential of our partners, our deep commitment to supporting this market evolution. We expect all of this together amalgamates into industrial logic that's going to prevail in the rollout of super premium tiers in the not too distant future. Now, with respect to your second question on AI and legal, let me address this from a couple of different vantage points. You also asked about protections that we have on our deals. We've actually seen some very positive developments in the U.S., for example, on the legislative front. Just last week, Senators Hawley and Blumenthal introduced bipartisan legislation to very specifically prohibit AI training on copyrighted works without permission. Earlier this month, the U.S. Senate voted 99 to 1 to remove a proposed 10-year moratorium on the enforcement of state laws on AI, some of which we view as being very helpful to protect artists' rights and publicity and ensure AI developers are transparent about their training materials. In the EU, the AI Act has been enacted, and it'll start to take effect for various platforms. It's not comprehensive, and specific invitations are still a work in progress, but it has some positive features, such as provisions requiring transparency on the part of AI companies. In the U.K., the creative sector's advocacy effort has been very strong. The government suffered its first debate in Parliament after the House of Lords backed amendments to the data bill, bolstering creators' intellectual property protections. Major media campaigns are underway. Petitions opposing the government's proposals have garnered tens of thousands of signatures from creators. All in all, spirited advocacy that's ratcheting up. In terms of our commercial deals, I'm glad that you point that out in your question because we continue to secure very important AI protections in our agreements with music services. These measures vary according to the nature of different partnerships, but they include working to ensure that AI models will not be trained on our artists' work without consent. AI recordings trained on our content will be removed. AI-generated music will not dilute our artists' royalties. AI content that misappropriates our artists' identities and infringes upon their right of publicity will also be removed. Various monitoring requirements are also included in these agreements. I would say, finally, to echo Sir Lucian's comments earlier, we believe that we will be able to effectively work to ensure that our artists' rights and interests are advanced and on balance that AI innovation is going to be a significant net positive for the music industry. I'd like to add, actually, thank you for that, Michael. With all of these products that we talked about in terms of super premium, Spotify, etc., getting the product right is more important to us than launching it too early. I really want to emphasize that we've got specific views on what we believe the fans want based on our own extensive consumer research that we've done and shared with the platforms. What we like about that is they've got their own data as well. Each of them has their own views on their own unique customers, consumers, and roadmaps. We're kind of blending them together. Finding, I suppose, the right marriage of this is absolutely essential, and it takes time. I'd love to say that it will be in 89 days or 91 days. We are not going to do anything to jeopardize the quality or the value of what the product is in order to rush it out. I wouldn't expect them to either. We continue to be bullish about the enormous opportunity of the super fan. I know that it's a view that over this next period that we share with each platform. On On AI, I've been through so many technological changes, and the industry has for the last 70, 80, 90 years. Every time we've been through a change, it's been an enormous positive. Over this period, over this most recent period, we've enabled numerous and many entrepreneurs. We're in dialogue with so many, if not all of the important players in the AI space. Some of them we've announced deals with, and others, there are constitutions and ideas and products and partnerships which are in the works. I just thought I'd add that on top of what you've said. Our next question comes from Julien Roch from Barclays. Your line is now open. Please go ahead. Yes, good evening. My first question is, you grew subscription streaming in Q1, 9.3%, 8.5% in Q2. Warner did 4% in Q1. Consensus at 4% for Q2. Sony did 4% in Q1 and all that consensus for Q2. It looks like you are significantly outperforming peers, which is great. When I look at available market share, Luminate in the U.S., for instance, your market share again don't seem to explain all of the outperformance. I was wondering whether there's an extra factor in your subscription streaming growth in H1 on top of market volume or market share, for instance, changing some contract terms or something else or nothing. That's my first question. The second one, going back to last year, you reported 9% subscription streaming in Q4, but you said it was actually 7.2% because there was a phasing of deal where you got paid more in Q4 versus previously. Q2 and Q3 should have been higher growth, but I don't think you ever gave us what the underlying growth was in Q2 and Q3 last year. Thank you. Julian, thank you for your questions. Let me unpack them, and I want to make sure that I'm targeting the essence of what you're asking. First of all, just to clarify in terms of the recent quarters, in Q4 of 2024, the growth rate that we cited was 7.2%. Excluding OTIs, that's the number that we've been very public about. It was 9.3% in the first quarter of this year, and then we just reported 8.5% for the second quarter of this year. In fact, going back four quarters, we've essentially been in this range, 8% or higher in our subscription growth. We've been pretty consistently delivering that. With respect to the question regarding the growth that we're reporting in subscription and outperforming the competition, I would simply say that we don't have visibility to their deal terms, to the internal dynamics of their operations, to what drives their reporting. We have very clearly articulated in the presentation we made on Capital Markets Day Streaming 2.0 how we define it and what we're looking to secure in our deals. W e believe because of the incredible performance of our artists and songwriters, the strength of our repertoire, that we are well positioned to work with the platforms on win-win deals that secure fair economics that reward us for the value that we bring to their platforms. That's a simple philosophical statement, but ultimately, I think if you go to what we defined as our execution projected out from Capital Markets Day, you know how we're doing what we're doing. We can't really comment on what the competitors aren't doing in relationship to that. We'll have to leave it to you to form your own judgments. I hope that that was responsive to your question. Our next question comes from the line of Rich Greenfield from Lightshed Partners. Your line's now open. Please proceed. Hi, this is Mark Kelley on for Rich. Thanks for taking the question. There's clearly a desire among consumers to use AI to interact and create and alter music. Could a super premium tier morph towards those AI features in 2026? We're excited about the potential for AI to bring innovation to many different aspects of streaming services and new types of products and services for consumers. We did some recent research that maybe points to the opportunity that might kind of clarify how we're thinking about this. We talked to consumers about their interest in AI and music. 51% of U.S. consumers expressed interest in AI integration in music, but half of those really wanted to focus AI integration to improve their music consumption experience, meaning better recommendations, better discovery, better content interaction. Of the various AI music categories, I don't think anyone will be surprised to hear that simulation or imitation of artists ranked the lowest. There's tremendous interest by consumers in a connection to the artist. We would kind of define that as a moral code where 75% of these consumers interested in AI said they believe that human creativity is essential. A similar percentage say connection to artists is key to their interest. This is consistent across age groups. Now, packing that up into an answer to your question, we think that one of the most appealing components of AI might be to provide fans with a deeper experience of artist work. For the artists who are interested in engaging with fans, enable new forms of content interaction, new forms of hyper-personalization. Certainly, if that improves the value of the music subscription experience, you'd want to price into that value proposition. Your question has an interesting premise, and the consumer research suggests that consumers are definitely looking for improvements in music subscription from AI. We believe that it can only support and help. Our next question comes from Lisa Yang from Goldman Sachs. Your line's now open. Please proceed. Hi, I have two questions, please. The first one is on the margins. Just a bit surprised why the margins not much more in Q2 given the significant decline in physical and merch and the boost from the settlement. Was a crossing. Just wondering if you can maybe give us a bit more details of what were the headwinds in that quarter, whether it was artist mix or the headwind from distribution. I think on H1 as well, publishing and merchandising margins were down, so not sure if you could elaborate on that and whether you expect that trend to continue or if it should reverse in H2. The second question is more capital allocation. There's been quite a few changes to the board composition lately. I'm just wondering how you're thinking about duplication for maybe your future capital allocation strategy, whether you might consider using your cash to buy some certain selling shareholders, whether you may rethink about the balance between buyback over dividends. Thank you. Hi, this is Boyd. A few comments round about margin. One of the comments that I made was that there was €50 million of cost savings delivered in the half year. If you look at that, what does that mean in terms of the total for our company? It's about 90 basis points. Clearly, you're not seeing the 90 basis points in these numbers. I think you've hit upon the right answer. It's more about business mix. The reason that I'm emphasizing that is if you look at our music publishing business, year to date, 12% revenue growth, 14.5%, I think it is for Q2. The reality is they're outperforming the market. I highlighted Cord in particular, and I referenced the generic kind of film and TV business administration. Those are very, very important strategic opportunities for us. They don't come at the same margin as other parts of our business, but they're incremental to, even if somewhat dilutive to, the margins. Just going back again to recorded music, the margins in recorded music expanded 70 basis points, so closer to what I was mentioning about the €50 million in terms of cost savings. The majority of the cost savings sit in recorded music and also at the consolidated UMG level. I think the way to look at it is, and let me go talk as well about the merchandising, because if you look at the merchandising, although the revenues were down for the reason that I mentioned just because of the comp to last year, the reality is that we also had over and above that the kind of impact in terms of our manufacturing and freight costs, where we had to scramble somewhat to change the sourcing of our products and merchandising for the reasons that I gave, which is tariffs. The fundamentals of the business in recorded music, I don't think there's anything to be concerned about there. Thank you. Our next question comes from the line of Michael Morris from Guggenheim. Your line's now open. Please go ahead. Thank you. Good afternoon. A couple of questions. One, can you share where you stand on the Streaming 2.0 renewals with your other major partners, not Spotify or Amazon Music? Any update on progress or what the timeframe might be? Do these new deals, in the past, you've spoken about your compensation being on the greater of, with the per subscriber minimums being a component of that. Do your new agreements have the same principles of greater of? One other thing, Boyd, you mentioned that short-form is not yet adequately monetized and that consumption there is growing. Can you expand a bit on that gap and share what the next steps may be to closing that gap? Thank you. Mike, thank you for your questions. Let me take the first one in terms of Streaming 2.0 deals and the structure of those deals. You can rest assured that we are in dialogue with all of our partners about moving forward with the 2.0 construct. Obviously, I can't reveal any confidential details or insights into specific conversations with any partners or provide you with the timetable, but that is our roadmap for engineering this change in the marketplace where we're looking to provide equal emphasis on customer value and ARPU, along with overall subscriber growth. That is the template that we're working off of. Those are the conversations that we're having with everybody. In terms of the underlying model, I'm glad you asked this question because I think that there's been a little confusion on this. As we look to implement Streaming 2.0 deals, we're still working with the construct where with subscription, we would set a per subscriber minimum, and then we would also have a greater of formulation that would enable us to set a rate that's a floor, but also participate in increased prices that might happen during the term of a deal. We talked about the three-pronged structure, and there's also typically a per play component in there. The two things that really matter in terms of the revenue we generate from the partners are the per subscriber minimum and the rev share. That construct remains constant moving into Streaming 2.0. Okay. Perhaps I could start with an apology to Lisa because I missed the second, or your second, question. I mean, our capital allocation, I mean, the way we look at this is it's about organic reinvestment into the business. That's the first and most important aspect of capital allocation. We then also want to reinvest into the business to support our strategic priorities. So there's M&A, and we've talked about this from time to time. M&A in growth markets, M&A in areas which are adjacencies which we don't have the skill set as we're kind of broadening our offering to the artists and to the songwriters. So there is M&A there. Last, returning capital to shareholders, we do do that. We just do it in the form of a dividend. We just announced for the half year $400 billion of capital being returned by way of a dividend for the first half of the year, and that's reasonably significant. Moving forward, as you referenced about would we use our balance sheet to participate in share buybacks, it's a very important consideration for the board. That debate about share buybacks is never very far away in terms of the conversation that we have with our board. We're stepping towards a U.S. listing, and although we actually can't say very much at this moment in time, all of these considerations are important as we step forward over the coming months. Finally, sorry, I mean, just to add to Michael's comment, I feel very inadequate answering this with Michael Nash in the room. You did ask me, Michael, so you'll get the inarticulate version. I mentioned about short-form not monetized, and this is where I steal Michael's line. It's very difficult to put a 15-second pre-roll in front of a 15-second piece of content. The problem is not just ours. This is a problem across all platforms and all advertisers, and the advertisers will need products that will enable them to engage with audience. It's a problem to be solved across not just us, but the wider kind of advertising industry. We continue to see increased engagement. We continue to see the migration from analog. Digital, you know, it's still moving, which might surprise you. The activity is impressive, and the short-form content monetization needs to evolve more. Thank you. That concludes today's Q&A session. Therefore, that concludes today's call. Thank you all for joining. You may now disconnect your line.