Slide 1: 2021 Fourth-Quarter & Full-Year Results
REUTERS / Maxim Shemetov Thomson Reuters 2021 FOURTH-QUARTER & FULL-YEAR RESULTS February 8, 2022 THOMSON REUTERS ?
Slide 2: Agenda
Agenda • Welcome / Introduction Frank Golden • Fourth-Quarter & Full-Year 2021 Highlights Steve Hasker Change Program Update • Financial Review Mike Eastwood Fourth-Quarter & Full-Year 2021 Updated 2022 & 2023 Outlook • Q&A 2 THOMSON REUTERS ?
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: Fourth-Quarter & Full-Year 2021 Highlights
THOMSON REUTERS Fourth-Quarter & Full-Year 2021 Highlights Change Program Update Updated 2022-2023 Outlook Steve Hasker President & CEO 4 THOMSON REUTERS
Slide 5: Fourth-Quarter & Full-Year 2021 Highlights
Fourth-Quarter & Full-Year 2021 Highlights 1. Strong organic revenue & sales growth continued in Q4 2021 • Legal, Tax, Risk, Fraud & Compliance markets continue to be robust, providing a tailwind 2. Change Program on track - run-rate savings of $217 million (as of December 31, 2021) 3. Achieved all
Slide 6: Fourth-Quarter 2021 Consolidated Results
Fourth-Quarter 2021 Consolidated Results IFRS Financial Measures ($ millions) 2021 2020 Change Revenues $1,710 $1,616 Up 6% Operating profit $257 $956 Down 73% Diluted (loss) earnings per share (EPS) ($0.36) $1.13 n/m Net cash provided by operating activities $397 $566 Down 30% Change at Constant Or
Slide 7: Fourth-Quarter 2021 Revenue Growth by Segment
Fourth-Quarter 2021 Revenue Growth by Segment Reported revenues up 6% to $1.7 billion Organic revenues up 6% Organic recurring revenues up 6% Tax Corporates Reuters News Global Print Professionals Legal Tax & Accounting Corporates Reuters News Global Print Professionals Professionals $0.7B $0.4B $0.
Slide 8: Full-Year 2021 Consolidated Results
Full-Year 2021 Consolidated Results IFRS Financial Measures ($ millions) 2021 2020 Change Revenues $6,348 $5,984 Up 6% Operating profit $1,242 $1,929 Down 36% Diluted earnings per share (EPS) $11.50 $2.25 n/m Net cash provided by operating activities $1,773 $1,745 Up 2% Change at Constant Organic No
Slide 9: Strategic Investment Priorities
7 Strategic Investment Priorities Strong Growth Verticals Accelerating Organic Growth Strategic Priorities FY 2021 Revenue THOMSONREUTERS 1 $445M Practical Law? THOMSON REUTERS THOMSON REUTERS (1) Legal 2 $220M HighQ EXPRESS CONTRACTE THOMSONREUTERS 3 WESTLAW TM $1,620M(4) 2021 Organic Government(2)
Slide 10: FY 2021 Actual Results vs. Updated Q3 2021 Guidance
FY 2021 Actual Results vs. Updated Q3 2021 Guidance 2021 Outlook 2021 Results 2021 Total Thomson Reuters 11.02.21 Before Currency Reported Before Currency Total Revenue Growth 4.5% - 5.0% 5.3% 6.1% Organic Revenue Growth (1) 4.5% - 5.0% 5.2% 5.2% Adjusted EBITDA Margin (1) 31.0% - 32.0% 31.3% 31.0%
Slide 11: Change Program On Track
Change Program On Track Transforming to a Content-Driven Technology Company 11 THOMSON REUTERS
Slide 12: Professional Services Markets in Transition
Professional Services Markets in Transition Prevailing Tailwinds Provide New Growth Opportunities Growth Drivers 1 • Legal, Tax & Regulatory complexity is growing Customers Seeing • Shift to virtual working environments & dispersed teams Fundamental Shifts in Ways of • Significant shifts in customer
Slide 13: We Made Progress Reducing Complexity in 2021
We Made Progress Reducing Complexity in 2021 2020 Complexity 2021 Progress ~25K • 37% revenue available in a Cloud solution ~62K Employees across 78 170+ SKUs • New digital experience launched for Westlaw and Countries Products and available variants Practical Law for sale • SMB digital sales increa
Slide 14: Change Program – 2021 Progress & 2022/2023 Targets
Transforming the Customer Experience Change Program – 2021 Progress & 2022/2023 Targets Successfully Launched Comprehensive New Omnichannel Better Customer Experience + New Products = End-to-End Digital Journey Experience is Live Higher NPS, Retention & Organic Growth • Accelerate innovation capabil
Slide 15: Product Innovation & New Initiatives Contributing to Growth
Product Innovation & New Initiatives Contributing to Growth 15 THOMSON REUTERS
Slide 16: Thomson Reuters Product Strategy Designed to Drive Higher Revenue Growth
Thomson Reuters Product Strategy Designed to Drive Higher Revenue Growth 1• Simplifying our portfolio and innovating on fewer, bigger growth bets Transforming 2• Further differentiating our flagship products Thomson Reuters into an Innovator and Builder of 3• Integrating products into end-to-end cus
Slide 17: Product Innovation & New Initiatives are Contributing to Growth
Product Innovation & New Initiatives are Contributing to Growth Product Innovation Dynamic Tool Set THOMSONREUTERS • Combines AI-enabled Legal search engine and state-of-the-art visualization/charting tools Practical Law? • Allows users to navigate resources, find relevant answers quicker • Compares
Slide 18: Increased 2022 - 2023 Outlook
Increased 2022 - 2023 Outlook Forecasting Faster Growth, Higher Margins, Record Free Cash Flow & FCF per Share 2020 2021 2022 2023 Organic Rev. Growth • Total TR 1.2% 5.2% ~ 5% 5.5% - 6.0% • Big 3 Segments 3.8% 6.2% 6.0% - 6.5% 6.5% - 7.0% Adj. EBITDA 33.0% 31.0% ~ 35% 39% - 40% Margin $1.3B $1.3B ~
Slide 19: Financial Review
Financial Review Fourth-Quarter & Full-Year 2021 Updated 2022 & 2023 Outlook Mike Eastwood Chief Financial Officer 19 THOMSON REUTERS
Slide 20: “Big 3” Revenues
Fourth-Quarter & Full-Year 2021 “Big 3” - Legal, Corporates and Tax & Accounting Revenues ($ millions) Fourth Quarter Full Year Constant Constant Revenues 2021 2020 Total Currency Organic 2021 2020 Total Currency Organic Legal Professionals 689 653 +5% +5% +6% 2,712 2,535 +7% +6% +6% Corporates 361
Slide 21: Fourth-Quarter & Full-Year 2021 Consolidated Revenues
Fourth-Quarter & Full-Year 2021 Consolidated Revenues ($ millions) Fourth Quarter Full Year Constant Constant Revenues 2021 2020 Total Currency Organic 2021 2020 Total Currency Organic Reuters News 182 164 +11% +12% +12% 674 628 +7% +7% +7% Global Print 170 177 -4% -4% -4% 609 620 -2% -3% -3% Elimin
Slide 22: Q4 2021 vs. Q4 2020 Organic Revenue Growth
Fourth-Quarter 2021 vs. Fourth-Quarter 2020 Recurring Revenue Organic Revenue Growth Recurring up 110 bps organically 9% 9% Big 3 Total TR 7% 7% 6% Organic Revenue Organic Revenue 6% 6% up 190 bps up 390 bps 6% 5% 5% Total 9% 8% 7% 7% Legal Prof. Corporates Tax & Acct. Big 3 Total TR 6% 6% Prof. 5%
Slide 23: “Big 3” Adjusted EBITDA
Fourth-Quarter & Full-Year 2021 “Big 3” - Legal, Corporates and Tax & Accounting Adjusted EBITDA ($ millions) Fourth Quarter Full Year Constant Constant Adjusted EBITDA 2021 2020 Total Currency 2021 2020 Total Currency Legal Professionals 239 245 -3% -2% 1,091 1,001 +9% +7% Margin 34.5% 37.5% 40.2%
Slide 24: Consolidated Adjusted EBITDA
Fourth-Quarter & Full-Year 2021 Consolidated Adjusted EBITDA ($ millions) Fourth Quarter Full Year Constant Constant Adjusted EBITDA 2021 2020 Total Currency 2021 2020 Total Currency Reuters News 15 6 +139% +107% 103 73 +40% +51% Margin 8.3% 3.9% 15.2% 11.7% Global Print 61 61 - -1% 226 242 -7% -8%
Slide 25: Adjusted Earnings Per Share, Free Cash Flow
Adjusted Earnings Per Share Free Cash Flow 25 THOMSON REUTERS
Slide 26: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Fourth Quarter Full Year % % 2021 Change 2021 Change Change Change Adjusted EBITDA $452 ($73) $1,970 ($5) Depreciation & Amortization ($167) ($4) ($651) $18 Interest Expense ($50) ($1) ($196) ($1) Income Tax ($25)
Slide 27: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Fourth Quarter Full Year 2021 2020 Change 2021 2020 Change Comparable Free Cash Flow (Continuing Operations) $323 $461 ($138) $1,490 $1,301 $189 Other Items (Change Program costs & Refinitiv separation costs) ($72) ($8) ($64) ($166) $46 ($212) Free Cash Flow
Slide 28: Change Program Investments & Savings
Change Program Investments & Savings 28 THOMSON REUTERS
Slide 29: Change Program FY 2022 Forecast & Cumulative Run-Rate Savings
Change Program FY 2022 Forecast & Cumulative Run-Rate Savings Achieved Run-Rate Operating Expense Savings of $217M as of December 31, 2021 FY 2022 Run-Rate Savings Forecast to More Than Double to ~$500M ~$500M $217M $132M $90M $19M Q1-2021 Q2-2021 Q3-2021 FY-2021 FY-2022 Cumulative Cumulative Cumula
Slide 30: Change Program Investments 2021 - 2022
Change Program Investments 2021 - 2022 2021 & 2022 Phasing $295M ~$305M Operating Expenditures (OpEx) ~60% $183M ~$160M - $180M ~$130M - $150M ~60% ~60% $112M ~40% Capital Expenditures (Capex) ~40% ~40% FY 2021 H1-2022 H2-2022 FY 2022 30 THOMSON REUTERS ? Note: Capital spend on accrual basis
Slide 31: Capital Structure Update
Capital Structure Update 31 THOMSON REUTERS
Slide 32: Significant Financial Capacity - Ready to Put to Work
Significant Financial Capacity - Ready to Put to Work Capital structure and liquidity position remain strong: • Capital capacity of ~$13 billion projected during 2022 - 2025 expected to provide significant organic and inorganic growth opportunities • Continuing to assess acquisition candidates • Pri
Slide 33: Ownership Stake in London Stock Exchange Group
Ownership Stake in London Stock Exchange Group Provides Substantial Optionality • TRI ownership interest in LSEG currently = 72.4 million shares ̶ Current LSEG Share Value = ~$7.0B / est. $14 value within TRI stock price (as of February 7) ̶ First tranche of LSEG shares may be sold on or after Janua
Slide 34: Long History of Returning Cash to Shareholders
Long History of Returning Cash to Shareholders 29 Consecutive Years of Annual Dividend Increases 2022 Annualized Dividend Increase of $0.16 (+10%) – Largest Increase Since 2008 Annualized Dividend per Common Share $2.00 $1.78 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 1996 2022 1993
Slide 35: 2022 & 2023 Outlook
2022 & 2023 Outlook 35 THOMSON REUTERS
Slide 36: Thomson Reuters & Big 3 Outlook 2022 - 2023
Thomson Reuters & Big 3 Outlook 2022 - 2023 Targeting Higher Organic Revenue Growth 2021 Total TR and Big 3 Organic Revenue Growth above 2019 levels Forecasting positive trend in 2022 and 2023 5.5% - 6.0% 5.2% ~ 5% 3.7% Includes Total TR ~100 bps Organic Revenue COVID- 1.2% related Growth benefit 20
Slide 37: Thomson Reuters – Outlook 2022 - 2023
Thomson Reuters – Outlook 2022 - 2023 Targeting Higher Adj. EBITDA Margin & Free Cash Flow Strong Adj. EBITDA Margin Improvement & Free Cash Flow Growth 39% - 40% Underlying Margin 33.9% ~ 35% 33.0% 25.3% Total TR Adj. EBITDA Margin 31.0% 1 2019 2020 2021 2022 2023 $1.9B - $2.0B Underlying FCF $1.4B
Slide 38: 2022 – 2023 Outlook
2022 – 2023 Outlook FY 2021 2/23/21 2/23/21 2/8/22 2/8/22 Total Thomson Reuters Reported FY 2022 Outlook(2) FY 2023 Outlook(2) FY 2022 Outlook(2) FY 2023 Outlook(2) Total Revenue Growth 6.1% 4.0% - 5.0% 5.0% - 6.0% ~ 5% 5.5% - 6.0% Organic Revenue Growth (1) 5.2% 4.0% - 5.0% 5.0% - 6.0% ~ 5% 5.5% -
Slide 39: Improving Momentum Provides Increasing Confidence
Improving Momentum Provides Increasing Confidence Confidence Factors Proof Points • Strong Q4 and full-year 2021 Sales – entering 2022 in solid position 1 Positive Business Trajectory • Performance creating momentum and building confidence as we work to achieve the 2022 and 2023 targets • Legal and
Slide 40: Q&A
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