Thomson Reuters Corporation · TSX:TRI
Thomson Reuters — Q3 2023 Earnings Presentation
22 slides from Thomson Reuters's earnings presentation, Nov 1, 2023
Slide 1: Thomson Reuters 2023 Third-Quarter Results
Photo Credit: Pascal Rossignol Aude Guerrucci Thomson Reuters 2023 Third-Quarter Results November 1, 2023
Slide 2: Agenda
Agenda • Welcome / Introduction Gary Bisbee • Third-Quarter 2023 Highlights Steve Hasker Casetext Integration and Generative AI Updates • Financial Review Mike Eastwood Third-Quarter 2023 Results 2023 Full-Year Outlook Update • Q&A 2
Slide 3: Special Note Regarding Forward-Looking Statements
Special Note Special Note Regarding Forward-Looking Statements, Material Assumptions and Material Risks 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 2023 Highlights
THOMSON REUTERS Third-Quarter 2023 Highlights Steve Hasker President & CEO
Slide 5: Third-Quarter 2023 Highlights
Third-Quarter 2023 Highlights 1. Solid Q3 broadly meets expectations • Q3 organic revenue growth of 6%, driven by 7% recurring revenue growth; “Big 3” Business Segments (Legal, Corporates and Tax & Accounting) revenues grew 7% organically • Q3 adjusted EBITDA margin upside largely driven by expense
Slide 6: Third-Quarter 2023 Consolidated Results
Third-Quarter 2023 Consolidated Results IFRS Financial Measures ($ millions) 2023 2022 Change Revenues $1,594 $1,574 Up 1% Operating profit $441 $398 Up 11% Diluted earnings per share (EPS) $0.80 $0.47 Up 70% Cash flow from operations $674 $531 Up 27% Change at Constant Organic Non-IFRS Financial Me
Slide 7: Third-Quarter 2023 Revenue Growth by Segment
Third-Quarter 2023 Revenue Growth by Segment Reported revenues up 1% to $1.6 billion Organic revenues up 6% Organic recurring revenues up 7% Tax Corporates Reuters News Global Print Professionals Tax & Legal Corporates Accounting Reuters News Global Print Professionals Professionals $0.7B $0.4B $0.2
Slide 8: Casetext Integration and Generative AI Updates
Casetext Integration and Generative AI Updates
Slide 9: Casetext Integration Updates
Casetext Integration Updates The combination of Casetext with Thomson Reuters offers a compelling strategic fit that will provide meaningful benefits for our customers and strong long-term value creation for our shareholders Key Strategic Benefits Principles of Casetext Integration Accelerates Gener
Slide 10: Generative AI Product Roadmap
Generative AI Product Roadmap 2023 Q4 2024 H1 2024 H2 Gen AI Commercial Release GenAI Releases Additional GenAI Releases Product • Westlaw Precision AI-Assisted • Practical Law Answers • Legal Roadmap Research • CoCounsel Core • Tax • Intelligent Drafting • Trade Timeline • Checkpoint • Audit Phase
Slide 11: Financial Review
Financial Review Third-Quarter 2023 Results Updated 2023 Outlook Mike Eastwood Chief Financial Officer
Slide 12: Third-Quarter 2023 Legal, Corporates, Tax & Accounting Professionals Revenues
Third-Quarter 2023 Legal, Corporates, Tax & Accounting Professionals Revenues ($ millions) Third Quarter Nine Months Constant Constant Revenues 2023 2022 Total Currency Organic 2023 2022 Total Currency Organic Legal Professionals 688 701 -2% -2% +6% 2,107 2,099 - +1% +6% Corporates 391 373 +5% +4% +
Slide 13: Third-Quarter 2023 Consolidated Revenues
Third-Quarter 2023 Consolidated Revenues ($ millions) Third Quarter Nine Months Constant Constant Revenues 2023 2022 Total Currency Organic 2023 2022 Total Currency Organic Reuters News 180 171 +6% +5% +3% 549 535 +3% +2% +2% Global Print 137 146 -6% -5% -4% 408 430 -5% -4% -3% Eliminations / Roundi
Slide 14: Third-Quarter 2023 Consolidated Adjusted EBITDA
Third-Quarter 2023 Consolidated Adjusted EBITDA ($ millions) Third Quarter Nine Months Constant Constant Adjusted EBITDA 2023 2022 Total Currency 2023 2022 Total Currency Legal Professionals 338 324 +4% +3% 1,001 933 +7% +7% Margin 49.1% 46.2% 47.5% 44.5% Corporates 164 147 +12% +11% 481 443 +9% +9%
Slide 15: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Third Quarter Nine Months % % 2023 Change 2023 Change Change Change Adjusted EBITDA $632 $97 $1,971 $275 Depreciation & Amortization(1) ($139) $7 ($416) $21 Interest Expense(2) ($44) $4 ($133) $12 Income Tax ($73)
Slide 16: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Third Quarter Nine Months 2023 2022 Change 2023 2022 Change Comparable Free Cash Flow (Continuing Operations) $512 $470 $42 $1,314 $1,155 $159 Other Items (Change Program Costs) ($6) ($89) $83 ($80) ($275) $195 Free Cash Flow (Continuing Operations) $506 $381
Slide 17: London Stock Exchange Group Stake – 16.9M Shares Remain
London Stock Exchange Group Stake – 16.9M Shares Remain • Thomson Reuters has sold approximately 55M shares in 2023, primarily via 4 large transactions - a private sale to Microsoft in January and 3 open market block trades (March, May, September) • Of the remaining 16.9M shares, 3.5M shares could b
Slide 18: 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 expected to grow to ~$10B by 2026, before announced $1B NCIB • Expected to provide significant organic and inorganic growth opportunities; continue to assess acquisition
Slide 19: 2023 Outlook Update
2023 Outlook Update
Slide 20: M&A Update
M&A Update asetext CoCounsel ima a 9 e en 2 2 WESTLAW JAPAN Close Date: August 17th, 2023 Close Date: July 14th, 2023 Close Date: November 1st, 2023 Imagen is a cloud-native Westlaw Japan, now wholly Casetext, through its CoCounsel Generative AI media asset management owned by Thomson Reuters, power
Slide 21: 2023 Updated Outlook
2023 Updated Outlook FY 2023 FY 2023 FY 2023 FY 2023 FY 2022 Total Thomson Reuters Outlook(3) Outlook(3) Outlook(3) Outlook(3) Reported 2/9/23 5/2/23 8/2/23 11/1/23 Total Revenue Growth 4% 4.5% - 5.0% 3.0% - 3.5% 3.0% - 3.5% Unchanged Organic Revenue Growth (1) 6% 5.5% - 6.0% 5.5% - 6.0% 5.5% - 6.0%
Slide 22: Q&A
Q&A