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POLYGRAM ANNOUNCES 1992 INTERIM RESULTS

 POLYGRAM ANNOUNCES 1992 INTERIM RESULTS
 NEW YORK, Aug. 11 /PRNewswire/ -- PolyGram (NYSE: PLG) today


announced the following interim results:
 POLYGRAM
 Netherlands Guilders Summary
 Six months to June 30 1992 1991 Percent Increase
 Net Sales NLG 2,984 m NLG 2,711 m up 10.1
 Income From Operations NLG 270 m NLG 245 m up 10.2
 Net Income NLG 171 m NLG 147 m up 16.3
 Net Income/Share NLG 1.01 NLG 0.86
 U.S. Dollars Summary
 Six months to June 30 1992 1991 Percent Increase
 Net Sales $1,735 $1,576 up 10.1
 Income From Operations 157 143 up 10
 Net Income 99 85 up 16
 Net Income/Share $.58 $.50 up 16
 Note: For the convenience of the reader, Netherlands guilder amounts have been converted to U.S. dollars at the exchange rate at June 30, 1992, of NLG 1 equals US$ 0.581.
 HIGHLIGHTS
 -- The growth achieved, despite difficult trading conditions in Europe, reflects a significant increase in U.S. market share (from 11.5 percent to around 14 percent), a strong international release schedule, and strict control over working capital and costs.
 -- Net sales in North America increased to 22 percent of total group sales, up from 18 percent in the first half of 1991. U.S. hits included Billy Ray Cyrus' debut album, "Some Gave All," which sold 2.5 million copies by June 30, 1992.
 -- Motown license exceeded expectations with sales, including over one million copies outside the U.S.A. of Lionel Richie's "Back to Front" album.
 -- Other best-selling albums included Elton John's "The One," which sold over one million units, and Def Leppard's "Adrenalize," which sold 4.5 million units.
 -- Classical vocal artists, including Kiri te Kanawa, Jessye Norman, Placido Domingo, and Luciano Pavarotti, were best-sellers for PolyGram's three classical labels.
 -- PolyGram Filmed Entertainment, operating according to its long range plan, established a new movie marketing and distribution company, Gramercy Pictures, in association with Universal Pictures.
 -- Really Useful (30 percent owned by PolyGram) performed well, and the Olympic Games theme tune, "Amigos Para Siempre," composed by Andrew Lloyd Webber and sung by Jos Carreras and Sarah Brightman, was released through Polydor.
 -- Digital compact cassette is expected to gain the consumer acceptance necessary to ensure that it becomes the successor to the analogue cassette.
 -- Substantial manufacturing investment helped the group to improve its competitive edge and margins.
 -- PolyGram is confident that 1992 will be another year of progress.
 Polygram: 1992 Interim Report To Shareholders President's Statement
 I am pleased to report that PolyGram made good progress during the first six months of 1992. We increased net sales and income from operations and enjoyed a strong 16 percent improvement in net profits. This growth was achieved despite difficult trading conditions in Europe and a weaker release schedule in classical music than in previous years. Our success in breaking new talent and in expanding the opportunities we offer to our artists continued during the first half of 1992, demonstrating that our strategy for growth is soundly based.
 Net sales reached Netherlands guilders (NLG) 2,984 million, an increase of 10 percent on the NLG 2,711 million for the first half of 1991. Sales in North America, including new consolidations, increased 46 percent. Income from operations rose to NLG 270 million, compared with NLG 245 million for 1991, helped by a strong performance at our compact disc (CD) factories and the turnaround of our North American activities. Net income and net income per share were NLG 171 million and NLG 1.01 respectively, compared to NLG 147 million and NLG 0.86 for the same period in 1991.
 These results reflect further significant growth in the United States (where our market share in recorded music increased to an estimated 14 percent from 11.5 percent at the end of June, 1991), our strong international release schedule, good performance from national repertoire, and the benefits of strict control of working capital and costs.
 In the U.S., our highlight of the first six months of 1992 was the excellent performance by Mercury Records' Billy Ray Cyrus. His debut album, "Some Gave All," was an immediate hit, holding the number one position in the American pop charts for several weeks and so far selling 2.5 million records worldwide. Other new artists who enjoyed significant chart success in the first six months included Black Sheep, CeCe Peniston, Shanice, and Ugly Kid Joe. Def Leppard topped the American album charts, and Vanessa Williams produced her first number one single.
 Our relationship with Motown, which began in the latter half of last year, has exceeded our expectations and has been mutually beneficial. Lionel Richie's "Back to Front" album, which was released in May, sold over 1 million copies outside the U.S., while new artist Shanice reached number two in the U.S. singles chart. I am confident that our work with Motown will help PolyGram's involvement in black music to grow substantially.
 Other best-selling pop albums included Def Leppard's "Adrenalize," which has so far sold 4.5 million copies, and Elton John's "The One," which had exceeded one million units by the end of June. Four 1991 releases -- Bryan Adams' "Waking Up the Neighbors," U2's "Achtung Baby," Tears for Fears' greatest hits compilation, and Vanessa Williams' "The Comfort Zone" have sold at least a further one million copies each in 1992. We also signed a major recording contract with Elton John and international music publishing agreements with U2, INXS, and Joan Armatrading.
 Best-selling vocal artists on PolyGram's three classical labels in the first half of 1992 included Cecilia Bartoli, Kathleen Battle, Placido Domingo, Dmitri Hvorostovsky, Kiri te Kanawa, Jessye Norman, Luciano Pavarotti, and Cheryl Studer. All of these star artists will appear in important recordings in the second half of the year.
 Decca's video recording of the "Three Tenors," released in 1990, continued its ground-breaking success to become PolyGram's best-selling video in the first six months of 1992. Other best-selling videos included The Wonderstuff's "Welcome to the Cheap Seats" and Def Leppard's "Historia."
 The establishment of PolyGram Filmed Entertainment has progressed according to plan. In May, together with Universal Pictures, we formed Gramercy Pictures in Los Angeles to market and distribute medium-budget theatrical movies in North America. Films released during the period included "A Midnight Clear," the World War II movie written and directed by Keith Gordon; and "Ruby," starring Danny Aiello, which opened to disappointing box office receipts. Films awaiting release include "Candyman," starring Virginia Madsen and Tony Todd and directed by Bernard Rose; "A Stranger Among Us," starring Melanie Griffith as a tough New York police officer; "Bob Roberts," starring, written, and directed by Tim Robbins; and "Map of the Human Heart," directed by Vincent Ward.
 Really Useful Holdings, in which we have a 30 percent stake, has performed well in the first six months. Its world famous stage shows continue their sold-out runs, and its most recent production, "The Music of Andrew Lloyd Webber," has been touring internationally. The recording of the official Olympic Games theme, "Amigos Para Siempre," composed by Andrew Lloyd Webber and sung by Jos Carreras and Sarah Brightman, has been released through Polydor.
 We look forward to the international launch later in the year of the new music system, digital compact cassette (DCC), for which PolyGram is manufacturing the first pre-recorded titles and which has won wide support in the record industry and among consumer electronics manufacturers. We believe that DCC will gain the consumer acceptance necessary to ensure that it becomes the successor to the existing analogue cassette.
 Our substantial investment program has enabled us to maintain our competitive edge and to improve margins. In March, we announced the modernization of our CD factory in Hanover, involving the expenditure of approximately NLG 67 million. Effective Jan. 1, 1992, we acquired Philips' American CD factory in Kings Mountain, N.C., for NLG 43 million. This investment secures a fast and economical supply of product to meet our growing demand.
 As well as the strong carry-over of releases from the first half of 1992, we have an exciting release schedule planned for the second half, including new pop albums from Bon Jovi, Extreme, INXS, Zucchero, Suzanne Vega, Cathy Dennis, and Ugly Kid Joe. Major classical releases will include three special collections: Sir Georg Solti on Decca, in celebration of his 80th birthday; Claudio Abbado, to mark his 25th anniversary with Deutsche Grammophon; and an audio and video Richard Wagner Edition on Philips Classics, featuring 20 years' outstanding live recordings from the Bayreuth Festival. Philips Classics will also be releasing a major new recording by John Mauceri and the Hollywood Bowl Orchestra of "The King and I," starring Julie Andrews and Ben Kingsley in the principal roles.
 While there are few signs of world economic recovery, I believe that we continue to offer our buying public the right mix of entertainment at affordable prices and that our team worldwide will go on proving its ability and creativity in establishing new talent. I am confident that 1992 will be another year of progress for the group.
 (Signed)
 Alain Levy, President and Chief Executive Officer of PolyGram
 POLYGRAM GROUP
 Consolidated Statements Of Income
 (In millions of Netherlands guilders except per share data)
 Percent
 Six months ended June 30 1992 1991 Increase
 Net Sales 2984 2711 +10.1
 Direct costs of sales (1585) (1485) --
 Gross Income 1399 1226 +14.1
 Selling, general and
 administrative expenses (1129) (981) --
 Income From Operations 270 245 +10.2
 Financial income and
 expenses 5 16 --
 Income Before Taxes 275 261 + 5.4
 Income taxes (88) (89) --
 Income After Taxes 187 172 + 8.1
 Equity in net income of
 non-consolidated companies (1) (3) --
 Group Income 186 169 +10.1
 Minority interests (15) (22) --
 Net Income 171 147 +16.3
 Average Number of Shares
 Outstanding 170,000,000 170,000,000 --
 Net Income Per Share NLG 1.01 NLG 0.86 --
 POLYGRAM GROUP
 Consolidated Balance Sheets
 (In millions of Netherlands guilders)
 ASSETS 6/30/92 12/31/91
 Intangible fixed assets 1183 1146
 Tangible fixed assets 583 501
 Non-consolidated companies 245 253
 Other non-current financial assets 43 31
 Inventories 531 490
 Receivables and pre-paids 2010 2226
 Liquid assets 231 328
 TOTAL ASSETS 4826 4975
 LIABILITIES
 Shareholders equity 847 737
 Other group equity 396 394
 Total Group Equity 1243 1131
 Long term provisions 639 668
 Short term provision 514 476
 Long term liabilities 297 296
 Current liabilities 2133 2404
 TOTAL LIABILITIES
 AND EQUITY 4826 4975
 POLYGRAM GROUP
 Consolidated Statements Of Income
 (In millions of U.S. dollars except per share data)
 Six months ended June 30 1992 1991
 Net Sales 1735 1576
 Direct cost of sales (922) (863)
 Gross Income 813 713
 Selling, general and
 administrative expenses (656) (570)
 Income From Operations 157 143
 Financial income and expenses 3 9
 Income Before Taxes 160 152
 Income taxes (52) (52)
 Income After Taxes 108 100
 Equity in net income (loss) of
 non-consolidated companies -- (2)
 Group Income 108 98
 Minority interests (9) (13)
 Net Income 99 85
 Net Income Per Share 58 cents 50 cents
 Note: For the convenience of the reader, Netherlands guilder amounts have been converted to U.S. dollars at the exchange rate at June 30, 1992, of NLG 1 equals US$ 0.581
 -0- 8/11/92
 /CONTACT: Amanda Whitwell of PolyGram International, London, 44-71-493-8800/
 (PLG) CO: PolyGram International ST: IN: ENT SU: ERN


SM -- NY021 -- 8858 08/11/92 09:53 EDT
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