UMG’s 1H21 result was better than expected. As was well guided too, earnings were impacted by ongoing COVID disruptions, adverse FX and increased costs. Importantly, 2H21 outlook comments were more upbeat and an improvement in trading is expected based on an easing of COVID restrictions. The benefits from its Business Transformation Program of A$30m by FY24, were materially higher than expected. We have upgraded our forecasts. Trading on an FY22/23 EV/EBITDA multiple of 9.1x/8.4x, we think a good portion of the recovery is priced in and maintain a Hold rating with a new PT of A$4.79.
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