Thomson Reuters Corporation · TSX:TRI
Thomson Reuters — FY2017 Earnings Presentation
22 slides from Thomson Reuters's earnings presentation, Feb 8, 2018
Slide 1: Thomson Reuters 2017 Full-Year and Fourth-Quarter Results
REUTERS / Jean-Paul Pelissier THOMSON REUTERS 2017 FULL-YEAR AND FOURTH-QUARTER RESULTS
Slide 2: Special Note: Non-IFRS Financial Measures
Special Note Non-IFRS Financial Measures This presentation contains disclosures of certain non-IFRS financial measures. These measures include adjusted EBITDA and the related margin, free cash flow, adjusted EPS, return on invested capital and selected measures before the impact of currency. Please
Slide 3: Thomson Reuters 2017 Highlights
THOMSON REUTERS 2017 HIGHLIGHTS 3
Slide 4: 2017 – A Year of Delivery & Continued Progress
2017 – A Year of Delivery & Continued Progress Record High EBITDA Margin & Adjusted EPS • Full-Year 2017 Adj. EPS of $2.51 • Record high for the company & exceeded target set in 2014 • Full-Year Adj. EBITDA margin 30.3% • Record high for the company • Performance driven by transformation programs Re
Slide 5: Full-Year 2017 Results vs. 2017 Outlook
Full-Year 2017 Results vs. 2017 Outlook Achieved or exceeded guidance for each metric 2017 Revised Outlook 2017 Results (Before impact of currency) (Before impact of currency) Revenues Low Single Digit 2% Adjusted EBITDA Margin 29.3% - 30.3% 30.2% Free Cash Flow $0.9 - $1.2 billion $1.0 billion $2.4
Slide 6: Q4 2017 Consolidated Results
Q4 2017 Consolidated Results Change at Constant Change at Constant Reported Currency Currency Excl. Q4-16 Charge Revenues Up 3% Up 1% Up 1% Adjusted EBITDA Up 38% Up 36% Up 1% Margin 29.7% vs. 22.2% in Q4 2016 Up 750bp Up 760bp Up 10bp Adjusted EPS Up 94% Up 87% Down 5% $0.60 vs. $0.31 in Q4 2016 Up
Slide 7: Q4 2017 Revenues by Business
Q4 2017 Revenues by Business ÿ$ 'T Financial & Risk Legal Tax & Accounting +1% +1% +6% Financial U.S. Online Legal Information Professional Risk Solutions Businesses Corporate U.S. Print Knowledge Solutions Government Note: Revenue growth rates are at constant currency 7
Slide 8: Financial Review
FINANCIAL REVIEW 8
Slide 9: Consolidated Results
Consolidated Results ($ millions) Fourth-Quarter Full-Year Change at Change at Constant Constant 2017 2016 Change Currency 2017 2016 Change Currency Exc. Q4-16 Exc. Q4-16 Charge(1) Charge(1) Revenues 2,944 2,860 +3% +1% 11,333 11,166 +1% +2% Adjusted EBITDA 874 635 +38% +1% 3,437 2,954 +16% +8% Adju
Slide 10: Legal
Legal ($ millions) Fourth-Quarter Full-Year Change at Change at Constant Constant 2017 2016 Change Currency 2017 2016 Change Currency Exc. Q4-16 Exc. Q4-16 Charge(1) Charge(1) Revenues 881 864 +2% +1% 3,390 3,367 +1% +1% Adjusted EBITDA 314 296 +6% -3% 1,279 1,232 +4% +2% Adjusted EBITDA Margin 35.6
Slide 11: Legal Revenue Growth By Type
Legal Revenue Growth By Type $400 Legal Solutions Revenues +2% +3% +3% +2% $350 +4% +4% +5% $300 +5% $250 Q1-17 $200 Q2-17 Q3-17 $150 -7% Q4-17 -4% -8% -7% $100 -9% -9% -9% -2% $50 $- U.S. Online Legal Info Solutions Recurring Solutions Transactions U.S. Print % of Fourth-Quarter Revenues 41% 36% 9%
Slide 12: Tax & Accounting
Tax & Accounting ($ millions) Fourth-Quarter Full-Year Change at Change at Constant Constant 2017 2016 Change Currency 2017 2016 Change Currency Exc. Q4-16 Exc. Q4-16 Charge(1) Charge(1) Revenues 443 416 +6% +6% 1,551 1,452 +7% +6% Adjusted EBITDA 156 131 +19% +5% 495 414 +20% +14% Adjusted EBITDA M
Slide 13: Tax & Accounting Revenue By Segment
Tax & Accounting Revenue By Segment Professional +7% Corporate +9% $170 million (38% of Revenue) $147 million (33% of Revenue) Fourth-Quarter Revenues $0.4 billion / +6% Knowledge Solutions -2% Government +101% $115 million (26% of Revenue) $11 million (3% of Revenue) 13
Slide 14: Financial & Risk
Financial & Risk ($ millions) Fourth-Quarter Full-Year Change at Change at Constant Constant 2017 2016 Change Currency 2017 2016 Change Currency Exc. Q4-16 Exc. Q4-16 Charge(1) Charge(1) Revenues 1,551 1,508 +3% +1% 6,112 6,057 +1% +1% Adjusted EBITDA 481 289 +66% +3% 1,916 1,629 +18% +6% Adjusted E
Slide 15: Financial & Risk Revenue By Segment
Financial & Risk Revenue By Segment Desktop -5% (-4% excluding pricing adjustment) Elektron Data Platform & Risk +5% $0.6 billion (37% of Revenue) $0.6 billion (40% of Revenue) Fourth-Quarter Revenues $1.6 billion / +1% Transactions +7% Recoveries -6% $0.3 billion (16% of Revenue) $0.1 billion (7% o
Slide 16: F&R Progress
F&R Progress 2013 2017 Variance Total Revenue Growth -1% +1% +200bp Revenue (constant currency) Metrics Retention Rate 86% 90% +400bp Desktop 48% 40% -800bp Revenue Mix Sell-Side 62% 56% -600bp EMEA 42% 40% -200bp Profitability / Adj. EBITDA Margin 25% 31% +600bp Scale # of Products 415 240 -42% 16
Slide 17: Adjusted Earnings Per Share, Free Cash Flow, Balance Sheet Update
ADJUSTED EARNINGS PER SHARE FREE CASH FLOW BALANCE SHEET UPDATE 17
Slide 18: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per Fourth-Quarter Full-Year share amounts) Change Exc. Change Exc. 2017 Change Q4-16 Charge 2017 Change Q4-16 Charge Adjusted EBITDA $874 $239 $3,437 $483 Depreciation & Computer ($254) $13 ($995) $29 Software Amortization Interest Expense ($90)
Slide 19: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Fourth-Quarter Full-Year % % 2017 2016 Change 2017 2016 Change Change Change Comparable Free Cash Flow $513 $693 ($180) -26% $1,730 $1,815 ($85) -5% Payment Related To Fourth- ($5) ($39) $34 ($142) ($39) ($103) Quarter 2016 Charge Pension Contribution $0 $200
Slide 20: Returning Capital To Shareholders
Returning Capital To Shareholders $2.7B $2.4B $2.1B $2.0B $1.4B $1.7B $1.5B $1.0B $1.0 $0.4B $1.1B $1.1B $1.0B $1.0B $1.0 2013 2014 2015 2016 2017 Dividends Share Buyback Shares Repurchased (millions) 10.9 28.3 35.9 41.9 22.8 Net Debt To Adj. EBITDA 2.1x 2.2x 2.3x 1.8x 1.9x 20
Slide 21: 2017 Debt Profile
2017 Debt Profile • Debt Outstanding = $7.3 billion • Net Debt / EBITDA <2.5x • Average maturity of term debt ~7 years • Average interest rate <5% 2000 1600 1200 800 400 0 2018* 2019 2020 2021 2022 2023 2024 2025 2026 2035 2040 2043 *Commercial Paper 21
Slide 22: Positive Return on Invested Capital Trend
Positive Return on Invested Capital Trend 7.4% 0.7% 7.7% 7.2% 6.7% 6.7% 5.3% 5.8% 2013 2014 2015 2016 2017 WACC Reported ROIC Excluding Charges 22