Slide 1: Thomson Reuters 2020 Third-Quarter Results
REUTERS / Pascal Rossignol REUTERS / Firstname Lastname Thomson Reuters 2020 THIRD-QUARTER RESULTS November 3, 2020 THOMSON REUTERS ?
Slide 2: Agenda
Agenda Welcome / Introduction Frank Golden Third-Quarter 2020 Results Steve Hasker Update & Next Steps Financial Review & 2020 Outlook Mike Eastwood Q&A 2 THOMSON REUTERS ?
Slide 3: Special Note Regarding Forward-Looking Statements
Special Note Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions This presentation consists of these slides and the associated remarks and comments, which are related and intended to be presented and understood together. Certain statements in this presentation
Slide 4: Third-Quarter 2020 Highlights
THOMSON REUTERS Third-Quarter 2020 Highlights Steve Hasker President & CEO 4 THOMSON REUTERS
Slide 5: Third-Quarter 2020 Results vs. Third-Quarter 2020 Outlook
Third-Quarter 2020 Results vs. Third-Quarter 2020 Outlook Total Thomson Reuters Q3 2020 Outlook Q3 2020 Outlook Q3 2020 Actuals Q3 2020 Actuals Before Currency(1) Before Currency Reported Total Revenue Growth 1.0% - 2.0% 2.5% 2.1% Organic Revenue Growth 1.0% - 2.0% 2.5% 2.5% “Big 3”(2) Q3 2020 Outlo
Slide 6: Third-Quarter 2020 Consolidated Results
Third-Quarter 2020 Consolidated Results IFRS Financial Measures ($ millions) 2020 2019 Change Revenues $1,443 $1,413 Up 2% Operating profit $318 $262 Up 21% Diluted earnings per share (EPS) $0.48 $(0.09) n/m Cash flow from operations $581 $264 Up 117% Change at Constant Organic Non-IFRS Financial Me
Slide 7: Third-Quarter 2020 Revenue Growth by Segment
Third-Quarter 2020 Revenue Growth by Segment Reported Revenues up 2% to $1.4 billion Organic revenues up 2% Organic recurring revenues up 4% Tax Corporates Reuters News Global Print Professionals Legal Tax & Accounting Corporates Reuters News Global Print Professionals Professionals $0.6B $0.3B $0.2
Slide 8: Reaffirming & Raising Full-Year 2020 Outlook
Reaffirming & Raising Full-Year 2020 Outlook Total Thomson Reuters 2020 Outlook Full-Year 2020 Nine-Months 2020 Nine-Months 2020 Outlook Actuals Actuals Before Currency(1) Before Currency Reported Total Revenue Growth 1.0% - 2.0% 2.0% 1.0% Organic Revenue Growth 0% - 1.0% 0.9% 0.9% Adjusted EBITDA M
Slide 9: Update & Next Steps
Update & Next Steps Building on Foundational Strengths Capitalizing on Opportunities Key Takeaways 9 THOMSON REUTERS
Slide 10: Moving From a Holding Company to an Operating Company
Moving From a Holding Company to an Operating Company Building on Foundational Strengths: • Leverage our strong position and customer access in our historically resilient markets • Combine our unique content with world class AI, Machine Learning and software to be a leading content-enabled technolog
Slide 11: Key Takeaways
Moving From a Holding Company to an Operating Company Key Takeaways ❑ Building from a position of strength as we focus on higher-growth opportunities ❑ Strategic growth plan will not require transformational M&A or miracle growth bets ❑ Rigorous execution is critical to success + We will execute wit
Slide 12: Confident in Returning to a Healthy & Sustainable Value Creation Model
Confident in Returning to a Healthy & Sustainable Value Creation Model Revenue Growth FCF Growth Prioritize capital to highest growth FCF = Lifeblood of future opportunities success/growth Organic: 3%-5%* 4%-7% 6%-10% Acquisitions: 1%-2% revenue growth FCF growth ~2.5x ~ 50-60% Net Debt to Dividend
Slide 13: Financial Review
Financial Review Mike Eastwood Chief Financial Officer 13 THOMSON REUTERS
Slide 14: Legal, Corporates, Tax & Accounting Revenues
Third-Quarter & Nine-Months 2020 Legal, Corporates, Tax & Accounting Revenues ($ millions) Third Quarter Nine Months Normalized Constant Constant Organic Revenues 2020 2019 Total Currency Organic 2020 2019 Total Currency Organic Growth Legal Professionals 636 607 +5% +4% + 3% 1,882 1,812 +4% +4% +3%
Slide 15: Consolidated Revenues
Third-Quarter & Nine-Months 2020 Consolidated Revenues ($ millions) Third Quarter Nine Months Normalized Constant Constant Organic Revenues 2020 2019 Total Currency Organic 2020 2019 Total Currency Organic Growth Reuters News 154 155 +0% -1% -2% 464 466 +0% +0% -6% Global Print 154 168 -8% -7% -7% 4
Slide 16: Q3 2020 vs. Q3 2019 Organic Revenue Growth
Third-Quarter 2020 vs. Third-Quarter 2019 Organic Revenue Growth Recurring Recurring Revenue down 140 bps 8% organically 8% Big 3 Total Company Organic Revenue Organic Revenue 6% Q3 2020 = Q3 2019 down 110 bps 6% 5% 5% 5% Total 4% 4% 4% 10% 8% 6% Legal Prof. Corporates Tax & Acct. Big 3 Total TR 5%
Slide 17: Legal, Corporates, Tax & Accounting Adjusted EBITDA
Third-Quarter & Nine-Months 2020 Legal, Corporates, Tax & Accounting Adjusted EBITDA ($ millions) Third Quarter Nine Months Constant Constant Adjusted EBITDA 2020 2019 Total Currency 2020 2019 Total Currency Legal Professionals 272 222 +22% +21% 756 680 +11% +11% Margin 42.8% 36.7% 40.2% 37.6% Corpo
Slide 18: Consolidated Adjusted EBITDA
Third-Quarter & Nine-Months 2020 Consolidated Adjusted EBITDA ($ millions) Third Quarter Nine Months Constant Constant Adjusted EBITDA 2020 2019 Total Currency 2020 2019 Total Currency Reuters News 23 16 +53% +65% 67 58 +16% +7% Margin 15.2% 10.0% 14.5% 12.4% Global Print 64 71 -10% -11% 181 217 -17
Slide 19: Adjusted EBITDA Margin Performance
Third-Quarter 2020 Adjusted EBITDA Margin Performance Underlying +390 bps Expansion on Underlying Adj. EBITDA Underlying Adj. EBITDA Adj. EBITDA 30.1% YOY 34.0% 1.0% -0.4% 5.1% 0.5% -2.3% 3.9% 1x Costs 1.8% Stranded Costs 34.0% +960 bps Expansion on 24.4% Reported Adj. EBITDA YOY Q3-2019 Acquisition
Slide 20: Adjusted Earnings Per Share, Free Cash Flow
Adjusted Earnings Per Share Free Cash Flow 20 THOMSON REUTERS
Slide 21: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Third Quarter Nine Months % % 2020 Change 2020 Change Change Change Adjusted EBITDA $491 $146 $1,450 $353 Depreciation & Amortization ($194) ($39) ($506) ($70) Interest Expense ($49) ($9) ($146) ($34) Income Tax ($
Slide 22: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Third Quarter Nine Months 2020 2019 Change 2020 2019 Change Comparable Free Cash Flow (Continuing Operations) $459 $332 $127 $840 $650 $190 Other Items (Q1-19 pension contribution & Refinitiv separation costs) $85 ($170) $255 $54 ($542) $596 Free Cash Flow (C
Slide 23: Update on Proposed Sale of Refinitiv to London Stock Exchange Group
Update on Proposed Sale of Refinitiv to London Stock Exchange Group • TRI expected ownership interest in LSEG upon transaction closing = ~82.5M shares ̶ Value = ~$8.8B / ~$18 value within TRI stock price [based on LSEG 11/2/20 closing price] ̶ Transaction expected to close in the first-quarter of 20
Slide 24: 2020 Outlook
2020 Outlook 24 THOMSON REUTERS
Slide 25: Reaffirming & Raising Full-Year 2020 Outlook
Reaffirming & Raising Full-Year 2020 Outlook Total TR Big 3 2020 Outlook(1) 2020 Outlook(1) Total Revenue Growth 1.0% - 2.0% 3.0% - 4.0% Organic Revenue Growth 0% - 1.0% 3.0% - 4.0% 37.0% - 38.0% Adjusted EBITDA Margin (Increased from 31.0% - 32.0%) ~ 32.0% (Up from 36% - 37%) Corporate Costs $140 -
Slide 26: Q&A
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