Thomson Reuters Corporation · TSX:TRI
Thomson Reuters — Q1 2021 Earnings Presentation
22 slides from Thomson Reuters's earnings presentation, May 4, 2021
Slide 1: 2021 First-Quarter Results
REUTERS / Pascal Rossignol REUTERS / Firstname Lastname Thomson Reuters 2021 FIRST-QUARTER RESULTS May 4, 2021 THOMSON REUTERS ?
Slide 2: Agenda
Agenda • Welcome / Introduction Frank Golden • First-Quarter 2021 Results Steve Hasker • Financial Review Mike Eastwood First-Quarter 2021 Q2 2021 Outlook / Full-Year 2021 Update • Q&A 2 THOMSON REUTERS ?
Slide 3: Special Note Regarding Forward-Looking Statements
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: First-Quarter 2021 Highlights
THOMSON REUTERS First-Quarter 2021 Highlights Steve Hasker President & CEO 4 THOMSON REUTERS
Slide 5: Encouraging Q1 2021 Results
Encouraging Q1 2021 Results Our Businesses are Well Positioned for a Post-COVID World 1. Robust & Growing Legal, Tax and Government (Risk, Fraud & Compliance “RF&C”) Businesses • Big 3 – 5% organic growth – Best Q1 growth post-Refinitiv split in 2018 • Legal 5% organic revenue growth – Best growth s
Slide 6: First-Quarter 2021 Consolidated Results
First-Quarter 2021 Consolidated Results IFRS Financial Measures ($ millions) 2021 2020 Change Revenues $1,580 $1,520 Up 4% Operating profit $387 $290 Up 34% Diluted earnings per share (EPS) $10.13 $0.39 n/m Cash flow from operations $380 $176 Up 115% Change at Constant Organic Non-IFRS Financial Mea
Slide 7: First-Quarter 2021 Revenue Growth by Segment
First-Quarter 2021 Revenue Growth by Segment Reported Revenues up 4% to $1.6 billion Organic revenues up 3% Organic recurring revenues up 3% Tax Corporates Reuters News Global Print Professionals Legal Tax & Accounting Corporates Reuters News Global Print Professionals Professionals $0.7B $0.4B $0.2
Slide 8: Change Program – On Track & Continuing to Ramp Up
Change Program – On Track & Continuing to Ramp Up • Executing on clearly defined operational & financial targets each quarter ▪ Four Key Focus Areas/Workstreams 1) Reimagine the Customer Experience by making it easier for our customers to do business with us 2) Optimize & Modernize by simplifying ou
Slide 9: Financial Review
Financial Review Mike Eastwood Chief Financial Officer 9 THOMSON REUTERS
Slide 10: Legal, Corporates, Tax & Accounting Professionals Revenues
First-Quarter 2021 Legal, Corporates, Tax & Accounting Professionals Revenues ($ millions) First Quarter Constant Revenues 2021 2020 Total Currency Organic Legal Professionals 668 626 +7% +5% +5% Corporates 384 367 +5% +4% +4% Tax & Accounting Professionals 225 218 +3% +5% +5% Big 3 Revenues 1,277 1
Slide 11: First-Quarter 2021 Consolidated Revenues
First-Quarter 2021 Consolidated Revenues ($ millions) First Quarter Constant Revenues 2021 2020 Total Currency Organic Reuters News 160 155 +3% +2% +2% Global Print 143 155 -7% -9% -9% Eliminations / Rounding (1) Total Revenues 1,580 1,520 +4% +3% +3% 11 THOMSON REUTERS ?
Slide 12: Second-Quarter 2021 Forecast
Thomson Reuters Second-Quarter 2021 Forecast 2020 FY 2020 FY Total Thomson Reuters Organic = 1.2% Big 3 Segments Organic = 3.8% 5.5% - 6.5% 6% - 7% 5.0% - 5.5% 3% 3.5% - 4% 5% 5% 5% 3% 3% 5% 6% - 7% 2% 5.5% - 6.5% 0% 5.0% - 5.5% 3.5% - 4% 3% 5% 5% 5% 3% 2% 2% 2% 4% (2%) 2% Q1-2020 Q2-2020 Q3-2020 Q4
Slide 13: Legal, Corporates, Tax & Accounting Professionals Adjusted EBITDA
First-Quarter 2021 Legal, Corporates, Tax & Accounting Professionals Adjusted EBITDA ($ millions) First Quarter Constant Adjusted EBITDA 2021 2020 Total Currency Legal Professionals 279 230 +21% +18% Margin 41.8% 36.7% Corporates 146 117 +25% +25% Margin 38.1% 31.9% Tax & Accounting Professionals 98
Slide 14: First-Quarter 2021 Consolidated Adjusted EBITDA
First-Quarter 2021 Consolidated Adjusted EBITDA ($ millions) First Quarter Constant Adjusted EBITDA 2021 2020 Total Currency Reuters News 28 19 +45% +65% Margin 17.6% 12.6% Global Print 57 63 -9% -11% Margin 39.9% 40.5% Corporate Costs (50) (33) Total Adjusted EBITDA 558 480 +16% +15% Margin 35.3% 3
Slide 15: Adjusted EBITDA Margin Performance
First-Quarter 2021 Adjusted EBITDA Margin Performance Underlying Underlying +440 bps Expansion on Adj. EBITDA Adj. EBITDA Underlying Adj. EBITDA YOY 31.6% 36.0% -0.3% 0.1% 0.7% Change Program 4.9% -0.3% 35.3% 31.6% +370 bps Expansion on Reported Adj. EBITDA YOY Q1 2020 Actuals UltraTax State Initiat
Slide 16: Adjusted EPS, Free Cash Flow, Change Program Costs
Adjusted Earnings Per Share Free Cash Flow Change Program Costs 16 THOMSON REUTERS
Slide 17: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) First Quarter 2021 Change % Change Adjusted EBITDA $558 $78 Depreciation & Amortization ($161) ($10) Interest Expense ($51) ($6) Income Tax ($57) ($13) Dividend declared on preference shares ($1) - Adjusted Earning
Slide 18: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) First Quarter 2021 2020 Change Comparable Free Cash Flow (Continuing Operations) $288 $113 $175 Other Items (Refinitiv separation costs & Change Program Costs) ($12) ($63) $51 Free Cash Flow (Continuing Operations) $276 $50 $226 Free Cash Flow – Discontinued
Slide 19: Change Program Update – Q1 2021
Thomson Reuters Change Program Update – Q1 2021 1. Estimated investment of $500 million - $600 million (2021 & 2022) • Q1 2021 investment = $20 million (OpEx + Capital) 2. Estimated annual Operating Expense savings of $600 million by 2023 • Q1 2021 run rate Operating Expense savings = $19 million 3.
Slide 20: Change Program Investments
Change Program Investments Forecast More Than 50% of Change Program Costs Will Be Incurred in 2021 2021 Phasing ~$300M - $350M H1-2021: ~60% ~$85M - $110M ~$215M - $240M ~$65M - $90M ~60% OpEx ~60% ~40% ~40% Capital $11M ~40% $9M Q1-2021 Q2-2021 H2-2021 FY 2021 20 THOMSON REUTERS ?
Slide 21: Updating FY 2021 Outlook
Updating FY 2021 Outlook Q2 2021 Original 2021 Updated 2021 Total Thomson Reuters Outlook Outlook(1) Outlook(1) Total Revenue Growth 5.5% - 6.5% 3.0% - 4.0% 3.5% - 4.0% Organic Revenue Growth 5.5% - 6.5% 3.0% - 4.0% 3.5% - 4.0% Adjusted EBITDA Margin 30% - 31% Unchanged Corporate Costs $305 - $340 m
Slide 22: Q&A
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