Thomson Reuters Corporation · TSX:TRI
Thomson Reuters — Q2 2020 Earnings Presentation
25 slides from Thomson Reuters's earnings presentation, Aug 5, 2020
Slide 1: Thomson Reuters 2020 Second-Quarter Results
REUTERS / Vasily Fedosenko REUTERS REUTERS REUTERS // Mike / Marcos Mike Segar Blake Brindicci Leonhard Foeger THOMSON REUTERS 2020 SECOND-QUARTER RESULTS August 5, 2020
Slide 2: Agenda
Agenda Welcome / Introduction Frank Golden Second-Quarter 2020 Results Steve Hasker Financial Review & 2020 Outlook Mike Eastwood Q&A 2
Slide 3: Special Note
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: Second-Quarter 2020 Highlights
THOMSON REUTERS Second-Quarter 2020 Highlights Steve Hasker President & CEO 4
Slide 5: Second-Quarter 2020 Results vs. Second-Quarter 2020 Outlook
Second-Quarter 2020 Results vs. Second-Quarter 2020 Outlook Total Thomson Reuters Q2 2020 Outlook Q2-2020 Outlook Q2-2020 Actuals Q2-2020 Actuals Before Currency(1) Before Currency Reported Total Revenue Growth -1.0% to -2.0% 0.3% -1.2% Organic Revenue Growth -2.0% to -3.0% -1.6% -1.6% “Big 3”(2) Q2
Slide 6: Second-Quarter 2020 Consolidated Results
Second-Quarter 2020 Consolidated Results IFRS Financial Measures ($ millions) 2020 2019 Change Revenues $1,405 $1,423 Down 1% Operating profit $365 $447 Down 18% Diluted earnings per share (EPS) $0.25 $0.36 Down 31% Cash flow from operations $422 $113 Up 288% Change at Constant Organic Non-IFRS Fina
Slide 7: Second-Quarter 2020 Revenue Growth by Segment
Second-Quarter 2020 Revenue Growth by Segment Reported Revenues down 1% to $1.4 billion Organic revenues down 2% Organic recurring revenues up 3% Tax Corporates Reuters News Global Print Professionals Legal Tax & Accounting Corporates Reuters News Global Print Professionals Professionals $0.6B $0.3B
Slide 8: Reaffirming Full-Year 2020 Outlook
Reaffirming Full-Year 2020 Outlook Total Thomson Reuters 2020 Outlook Full-Year 2020 First-Half 2020 First-Half 2020 Outlook Actuals Actuals Before Currency(1) Before Currency Reported Total Revenue Growth 1.0% - 2.0% 1.7% 0.5% Organic Revenue Growth 0% - 1.0% 0.1% 0.1% Adjusted EBITDA Margin 31.0%
Slide 9: Thomson Reuters Looking Forward
Thomson Reuters Looking Forward • Opportunities to better connect and enable professional marketplaces • Opportunities to better serve our customers with solutions that are digital, virtual, real-time and automated • Thomson Reuters is extremely well positioned to support our customers in this trans
Slide 10: Financial Review
Financial Review Mike Eastwood Chief Financial Officer 10
Slide 11: Second-Quarter & Six-Months 2020 Revenues - Legal, Corporates, Tax & Accounting
Second-Quarter & Six-Months 2020 Revenues - Legal, Corporates, Tax & Accounting ($ millions) Second Quarter Six Months Normalized Constant Constant Organic Revenues 2020 2019 Total Currency Organic 2020 2019 Total Currency Organic Growth Legal Professionals 620 605 +2% +3% + 1% 1,246 1,205 +3% +4% +
Slide 12: Second-Quarter & Six-Months 2020 Consolidated Revenues
Second-Quarter & Six-Months 2020 Consolidated Revenues ($ millions) Second Quarter Six Months Normalized Constant Constant Organic Revenues 2020 2019 Total Currency Organic 2020 2019 Total Currency Organic Growth Reuters News 155 156 -1% +0% -11% 310 311 +0% +0% -8% Global Print 134 164 -19% -17% -1
Slide 13: First-Half 2020 vs. First-Half 2019 Organic Revenue Growth Details
First-Half 2020 vs. First-Half 2019 Organic Revenue Growth Details Recurring Recurring Revenue down 190 bps 9% organically Total Company 8% Organic Revenue 7% 6% down 350 bps 5% Total 4% 4% 4% 4% 6% 6% 5% 5% 1% 4% 4% Legal Prof. Corporates Tax & Acct. Big 3 Total TR 3% 3% % of Total 94% 81% 76% 87%
Slide 14: Thomson Reuters Third-Quarter 2020 Forecast
Thomson Reuters Third-Quarter 2020 Forecast Total Thomson Reuters Big 3 Segments 10% 10% 10% 6% 5% 5% 5% 5% 6% 3% - 4% 4% 3% 3% - 4% 1% - 2% 1% - 2% 5% 5% 3% 0% 4% 3% - 4% 3% 4% 4% 4% 4% 3% - 4% 2% 1% - 2% 0% - 1% 2% -2% Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 FY 2020 Q1-2019 Q2-2019
Slide 15: Second-Quarter & Six-Months 2020 Adjusted EBITDA - Legal, Corporates, Tax & Accounting
Second-Quarter & Six-Months 2020 Adjusted EBITDA - Legal, Corporates, Tax & Accounting ($ millions) Second Quarter Six Months Constant Constant Adjusted EBITDA 2020 2019 Total Currency 2020 2019 Total Currency Legal Professionals 254 229 +11% +11% 484 458 +6% +6% Margin 40.9% 37.8% 38.8% 38.0% Corpo
Slide 16: Second-Quarter & Six-Months 2020 Consolidated Adjusted EBITDA
Second-Quarter & Six-Months 2020 Consolidated Adjusted EBITDA ($ millions) Second Quarter Six Months Constant Constant Adjusted EBITDA 2020 2019 Total Currency 2020 2019 Total Currency Reuters News 25 19 +24% +6% 44 42 +3% -12% Margin 15.6% 12.5% 14.1% 13.6% Global Print 54 72 -25% -24% 117 146 -20%
Slide 17: Second-Quarter 2020 Adjusted EBITDA Margin Performance
Second-Quarter 2020 Adjusted EBITDA Margin Performance Underlying +290 bps Expansion on Underlying Adj. EBITDA Underlying Adj. EBITDA Adj. EBITDA 31.2% YOY 34.1% 0.7% 0.4% -0.5% 4.9% -2.6% 4.4% 1x Costs 34.1% 1.8% Stranded Costs +910 bps Expansion on 25.0% Reported Adj. EBITDA YOY Q2 2019 Acquisitio
Slide 18: Adjusted Earnings Per Share Free Cash Flow
Adjusted Earnings Per Share Free Cash Flow 18
Slide 19: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Second Quarter Six Months % % 2020 Change 2020 Change Change Change Adjusted EBITDA $479 $124 $959 $207 Depreciation & Amortization ($161) ($19) ($312) ($31) Interest Expense ($52) ($15) ($97) ($25) Income Tax ($45
Slide 20: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Second Quarter Six Months 2020 2019 Change 2020 2019 Change Comparable Free Cash Flow (Continuing Operations) $268 $159 $109 $381 $318 $63 Other Items (Q1-19 pension contribution & Refinitiv separation costs) $32 ($93) $125 ($31) ($372) $341 Free Cash Flow (C
Slide 21: Well Balanced Debt Maturity Ladder with Substantial Access to Liquidity
Well Balanced Debt Maturity Ladder with Substantial Access to Liquidity • Capital structure and liquidity position both remain strong • Principal sources of liquidity: Cash on hand, cash from operations, $1.8B syndicated credit facility and $1.8B CP program • Current Net Debt / Adjusted EBITDA Ratio
Slide 22: 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 = ~$9.1B / ~$18 value within TRI stock price [based on LSEG 8/4/20 closing price] ̶ Transaction still expected to close before the end of 202
Slide 23: 2020 Outlook
2020 Outlook 23
Slide 24: Reaffirming Full-Year 2020 Outlook
Reaffirming 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% Adjusted EBITDA Margin 31.0% - 32.0% 36.0% - 37.0% Corporate Costs $140 - $150 million Free Cash Flow (Increased from ~$1 billio
Slide 25: Q&A
Q&A 25