Slide 1: Thomson Reuters 2018 Second-Quarter Results
REUTERS / Vasily Fedosenko REUTERS / Mike Blake Leonhard Foeger THOMSON REUTERS 2018 SECOND-QUARTER RESULTS August 08, 2018
Slide 2: Agenda
Agenda Welcome / Introduction Frank Golden Second-Quarter 2018 Highlights Jim Smith Update on F&R Strategic Partnership with Blackstone Financial Review – Second-Quarter 2018 Stephane Bello Q&A 2
Slide 3: Special Note: Safe Harbor / Forward-Looking Statements
Special Note Safe Harbor / Forward-Looking Statements 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 and discussion are forward-looking, including, but
Slide 4: Thomson Reuters Second-Quarter 2018 Highlights
THOMSON REUTERS SECOND-QUARTER 2018 HIGHLIGHTS JIM SMITH PRESIDENT & CEO 4
Slide 5: Q2 2018 Consolidated Results; Full-Year 2018 Outlook Reaffirmed
Q2 2018 – Consolidated Results (Excludes Financial & Risk which is now classified as a discontinued operation) Change at Constant Reported Currency Revenues vs prior-year period Up 2% Up 2% Adjusted EBITDA Down 8% Down 8% Q2 2018 Margin: 26.5% Down 320 bp Down 290 bp Adjusted EPS Down 11% Down 11% Q
Slide 6: Thomson Reuters New Operating Structure
Thomson Reuters New Operating Structure Thomson Reuters Legal Tax Reuters Corporates Global Print Professionals Professionals News Legal Tax Reuters Corporates Global Print Professionals Professionals News % of 43% 14% 23% 6% 14% Revenues 80% of 2017 Revenue Base 6 Sensitivity: Confidential
Slide 7: Preview of New Operating / Reporting Structure
Preview of New Operating / Reporting Structure 2017 Revenue & Organic 2017 Revenue & Organic Growth by Growth by Current BU New Customer Segment Reuters Reuters News News $0.3B Global $0.3B -3% -3% Print $0.8B -6% Tax & $1.6B Accounting +6% $2.3B Legal $5.3 Billion $5.3 Billion +2% Professionals +2%
Slide 8: Westlaw Edge elevates research so practitioners can work, think and deliver faster
Westlaw Edge elevates research so practitioners can work, think and deliver faster • Built for ALL customers: Large, Mid and Small law firms Corporate Counsels & Government Attorneys • Expected to accelerate online legal revenues • Pricing is in addition to current Westlaw contract Customers • “I lo
Slide 9: Westlaw Edge features
1. WESTSEARCH PLUS - RESPONSIVE Next generation of legal search with superior predictive research suggestions and the most responsive legal text for user questions 2. LITIGATION ANALYTICS - STRATEGIC Relevant data-driven insights on judges, courts, attorneys, law firms and case types to build the st
Slide 10: F&R Strategic Partnership Update
F&R STRATEGIC PARTNERSHIP UPDATE JIM SMITH PRESIDENT & CEO 10
Slide 11: Update on Financial & Risk Strategic Partnership
Update on Financial & Risk Strategic Partnership Regulatory Approval Progress • Transaction is expected to close early in the fourth quarter • Substantially all required regulatory approvals have been received at this time Operational Progress • Employees notified on March 31 of business allocation
Slide 12: Expected Use of Proceeds from Sale of 55% of F&R
Expected Use of Proceeds from Sale of 55% of F&R $17 billion of cash proceeds allocated to future growth investments, maintaining a strong capital structure and returning capital to shareholders Debt Pay Down ~$3-4B Investment Return of Capital Fund: ~$1-3B to Shareholders ~$9-10B Taxes, Fees & Expe
Slide 13: Financial Review
FINANCIAL REVIEW STEPHANE BELLO CHIEF FINANCIAL OFFICER 13
Slide 14: Consolidated Results
Consolidated Results (Excludes Financial & Risk which is now classified as a discontinued operation) ($ millions) Second-Quarter Six-Months Change Change 2018 2017 Change Before 2018 2017 Change Before Currency Currency Revenues 1,311 1,280 +2% +2% 2,690 2,611 +3% +2% Adjusted EBITDA 348 380 -8% -8%
Slide 15: Q2 2018 Results
Q2 2018 Results DISCONTINUED OPERATION Thomson Reuters F&R (excluding F&R) Reported Revenue Growth: +2% +3% Revenue Growth at Constant Currency: +2% +2%* Recoveries Print -3% / $0.1B -4% / $0.2B Recurring Recurring (Ex. Recoveries) +4% / $1.0B +2% / $1.2B Transactions +7% / $0.2B Transactions -2% /
Slide 16: Legal
Legal ($ millions) Second-Quarter Six-Months Change Change 2018 2017 Change Before 2018 2017 Change Before Currency Currency Revenues 882 858 +3% +2% 1,754 1,699 +3% +2% Recurring 640 613 +4% +4% 1,277 1,217 +5% +4% Transactions 79 77 +3% +0% 155 154 +1% -1% Print 163 168 -3% -5% 322 328 -2% -4% Adj
Slide 17: Legal Revenue By Segment
Legal Revenue By Segment Global Solutions +6% Global Print -5% (-6% Organic) $355 million (40% of Revenue) $163 million (18% of Revenue) Recurring: +7% (81% of revenue) Transactions: -1% (19% of revenue) Second-Quarter Revenues $0.9 billion / +2% (excluding Global Print +4%) U.S. Online Legal Inform
Slide 18: Tax & Accounting
Tax & Accounting ($ millions) Second-Quarter Six-Months Change Change 2018 2017 Change Before 2018 2017 Change Before Currency Currency Revenues 359 350 +3% +4% 796 767 +4% +4% Recurring 277 269 +3% +4% 587 557 +5% +6% Transactions 70 70 +0% +0% 184 185 -1% -1% Print 12 11 +9% +9% 25 25 +0% +0% Adju
Slide 19: Tax & Accounting Revenue By Segment
Tax & Accounting Revenue By Segment Professional +10% Corporate +2% $115 million (32% of Revenue) $138 million (39% of Revenue) Second-Quarter Revenues $0.4 billion / +4% Knowledge Solutions +1% Government +5% $94 million (26% of Revenue) $12 million (3% of Revenue) 19 Sensitivity: Confidential
Slide 20: Reuters News
Reuters News (Does not include Financial & Risk payment of $325m annually) ($ millions) Second-Quarter Six-Months Change Change 2018 2017 Change Before 2018 2017 Change Before Currency Currency Revenues 72 74 -3% -5% 144 148 -3% -6% Adjusted EBITDA 8 9 -11% -22% 16 22 -27% -32% Adjusted EBITDA Margi
Slide 21: Financial & Risk (Discontinued Operation)
Financial & Risk (Discontinued Operation) ($ millions) Second-Quarter Six-Months Change Change 2018 2017 Change Before 2018 2017 Change Before Currency Currency Revenues 1,553 1,501 +3% +2%(1) 3,136 2,986 +5% +3% Recurring ex. Recoveries 1,197 1,161 +3% +2% 2,409 2,311 +4% +2% Transactions 239 224 +
Slide 22: Adjusted Earnings Per Share, Free Cash Flow, Corporate Costs
ADJUSTED EARNINGS PER SHARE FREE CASH FLOW CORPORATE COSTS 22
Slide 23: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Second-Quarter Six-Months % % 2018 Change 2018 Change Change Change Adjusted EBITDA $348 ($32) $778 ($17) Depreciation & Computer Software ($129) ($2) ($257) ($6) Amortization Interest Expense ($81) $8 ($159) $22 I
Slide 24: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Second-Quarter Six-Months 2018 2017 Change 2018 2017 Change Comparable Free Cash Flow (Continuing Operations) $267 $291 ($24) $297 $323 ($26) Other Items (Q4-16 Charges paid and 2017 $500m pension contribution) $1 $16 ($15) $2 $548 ($546) Free Cash Flow (Cont
Slide 25: Estimated Corporate Costs
Estimated Corporate Costs ~$500M - $550M 2018 Full Year: ~$500M-$600M ~$210M ~$175M - $275M ~$190M $72M $44M Q1-18 Q2-18 Q3-18 Q4-18 2019 2020 25 Sensitivity: Confidential
Slide 26: 2018 Outlook
2018 Outlook Thomson Reuters 2018 Outlook(1) Restated 2017 Before Currency (excluding F&R) Revenue Growth $5.3 billion Low single digit(2) Adjusted EBITDA $1.6 billion $1.2 - $1.3 billion Corporate Costs $244 million $500 - $600 million Depreciation & Amortization of computer software $496 million $
Slide 27: Q&A
Q&A 27