Thomson Reuters Corporation · TSX:TRI
Thomson Reuters — Q3 2021 Earnings Presentation
26 slides from Thomson Reuters's earnings presentation, Nov 2, 2021
Slide 1: 2021 Third-Quarter Results
REUTERS / PascalSnyder REUTERS/Brian Rossignol REUTERS / Firstname Lastname Thomson Reuters 2021 THIRD-QUARTER RESULTS November 2, 2021 THOMSON REUTERS ?
Slide 2: Agenda
Agenda • Welcome / Introduction Frank Golden • Third-Quarter 2021 Results Steve Hasker • Financial Review Mike Eastwood Third-Quarter 2021 Full-Year 2021 Outlook 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: Third-Quarter 2021 Highlights
THOMSON REUTERS Third-Quarter 2021 Highlights Steve Hasker President & CEO 4 THOMSON REUTERS
Slide 5: Strong Third-Quarter & Nine-Months 2021 Results
Strong Third-Quarter & Nine-Months 2021 Results 1. Strong organic revenue growth and sales continued in Q3 • Four of five Business Segments revenues grew 6%+ organically in Q3 • Legal, Tax, Risk, Fraud & Compliance markets continue to be robust, providing a tailwind 2. Raised revenue and free cash f
Slide 6: Third-Quarter 2021 Consolidated Results
Third-Quarter 2021 Consolidated Results IFRS Financial Measures ($ millions) 2021 2020 Change Revenues $1,526 $1,443 Up 6% Operating profit $282 $318 Down 11% Diluted (loss) earnings per share (EPS) ($0.49) $0.48 n/m Net cash provided by operating activities $534 $581 Down 9% Change at Constant Orga
Slide 7: Third-Quarter 2021 Revenue Growth by Segment
Third-Quarter 2021 Revenue Growth by Segment Reported revenues up 6% to $1.5 billion Organic revenues up 5% 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 $0.2
Slide 8: Accelerating Organic Revenue Growth
Accelerating Organic Revenue Growth Building a Content-Driven Technology Company Product Innovation & Integration Contributing to Higher Organic Revenue Growth • Big 3 businesses achieved 6% average organic revenue growth rate for the first nine months of 2021 • Big 3 businesses achieved 5% average
Slide 9: Building a Content-Driven Technology Company
Building a Content-Driven Technology Company Product Innovation & Integration Contributing to Higher Growth 9 THOMSON REUTERS
Slide 10: 7 Strategic Investment Priorities
3 TR has Advantaged Exposure to High 7 Strategic Investment Priorities Growth Verticals Strong Growth Verticals Accelerating Organic Growth Strategic Priorities 2020 Revenue THOMSONREUTERS 1 ~$400M Practical Law" THOMSON REUTERS (1) Legal 2 THOMSON REUTERS ~$200M HighQ CONTRACTE EXPRESS 3 THOMSONREU
Slide 11: HighQ 5.6
HighQ 5.6 Legal Workflow Integrates Practical Law, Elite 3E, Contract Express & Microsoft Teams with HighQ Enhanced contract Delivering legal management with projects with Practical approval workflows and Law matter maps and Elite public access Contract 3E Data Insights integration Express questionn
Slide 12: Product Innovation & Integration Contributing to Higher Revenue Growth
Product Innovation & Integration Contributing to Higher Revenue Growth Latest HighQ release integrates Practical Law, 3E (Elite) & Contract Express These four products = 11% of Total TR Revenue & forecast to grow 10% 2021 (organic) +10% organic +6% Est. $715 organic $649M $589M ~$190M +16% $163M $14
Slide 13: Financial Review
Financial Review Mike Eastwood Chief Financial Officer 13 THOMSON REUTERS
Slide 14: Big 3 Revenues
Third-Quarter & Nine-Months 2021 “Big 3” - Legal, Corporates and Tax & Accounting Revenues ($ millions) Third Quarter Nine Months Constant Constant Revenues 2021 2020 Total Currency Organic 2021 2020 Total Currency Organic Legal Professionals 682 636 +7% +6% +6% 2,023 1,882 +7% +6% +6% Corporates 35
Slide 15: Consolidated Revenues
Third-Quarter & Nine-Months 2021 Consolidated Revenues ($ millions) Third Quarter Nine Months Constant Constant Revenues 2021 2020 Total Currency Organic 2021 2020 Total Currency Organic Reuters News 164 154 +6% +6% +6% 492 464 +6% +5% +5% Global Print 149 154 -3% -5% -5% 439 443 -1% -3% -3% Elimina
Slide 16: Q3 2021 vs Q3 2020 Organic Revenue Growth
Third-Quarter 2021 vs. Third-Quarter 2020 Recurring Revenue Organic Revenue Growth Recurring up 230 bps organically 10% Big 3 Total TR Organic Revenue Organic Revenue up 160 bps up 260 bps 7% 7% 6% 6% 6% 6% Total 5% 4% 4% 10% Legal Prof. Corporates Tax & Acct. Big 3 Total TR Prof. 6% 6% 6% 6% % of T
Slide 17: Full-Year 2021 Forecast
Thomson Reuters Full-Year 2021 Forecast 2020 FY 2020 FY Total Thomson Reuters Organic = 1.2% Big 3 Segments Organic = 3.8% 7% 7% 5% 4.5% - 5.0% 6% ~ 6% 3% 3% 3% 7% 7% 2% 5% 5% 5% 5% 5% 4.5% - 5.0% 6% ~ 6% 0% 3% 3% 5% 2% 2% 2% 5% 5% 4% (2%) 2% Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 F
Slide 18: Big 3 Adjusted EBITDA
Third-Quarter & Nine-Months 2021 “Big 3” - Legal, Corporates and Tax & Accounting Adjusted EBITDA ($ millions) Third Quarter Nine Months Constant Constant Adjusted EBITDA 2021 2020 Total Currency 2021 2020 Total Currency Legal Professionals 288 272 +6% +4% 852 756 +13% +11% Margin 42.3% 42.8% 42.1%
Slide 19: Consolidated Adjusted EBITDA
Third-Quarter & Nine-Months 2021 Consolidated Adjusted EBITDA ($ millions) Third Quarter Nine Months Constant Constant Adjusted EBITDA 2021 2020 Total Currency 2021 2020 Total Currency Reuters News 25 23 +4% +8% 88 67 +30% +44% Margin 14.9% 15.2% 17.8% 14.5% Global Print 52 64 -18% -19% 165 181 -9%
Slide 20: Adjusted EPS, Free Cash Flow, Change Program Costs
Adjusted Earnings Per Share Free Cash Flow Change Program Costs 20 THOMSON REUTERS
Slide 21: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Third Quarter Nine Months % % 2021 Change 2021 Change Change Change Adjusted EBITDA $458 ($33) $1,518 $68 Depreciation & Amortization ($159) $35 ($484) $22 Interest Expense ($46) $3 ($146) - Income Tax ($25) $30 ($
Slide 22: Consolidated Free Cash Flow
Consolidated Free Cash Flow ($ millions) Third Quarter Nine Months 2021 2020 Change 2021 2020 Change Comparable Free Cash Flow (Continuing Operations) $475 $459 $16 $1,167 $840 $327 Other Items (Refinitiv separation costs & Change Program costs) ($66) $85 ($151) ($94) $54 ($148) Free Cash Flow (Cont
Slide 23: Change Program Cumulative Run-Rate Savings & FY 2021 Forecast
Change Program Cumulative Run-Rate Savings & FY 2021 Forecast Achieved Run-Rate Operating Expense Savings of $132M through Q3 2021 Forecast FY 2021 Run-Rate Savings of ~$200M ~$200M $132M $90M $19M Q1-2021 Q2-2021 Q3-2021 FY-2021 Cumulative Cumulative Cumulative Outlook 23 THOMSON REUTERS ?
Slide 24: Change Program Investments
Change Program Investments Forecast ~ 50% of Change Program Costs of $600M Will Be Incurred in 2021 2021 Phasing ~$290M - $320M ~60% ~$120M - $150M $71M $79M ~60% OpEx $53M ~40% $41M $20M ~40% Capital $11M $29M $26M $9M Q1-2021 Q2-2021 Q3-2021 Q4-2021 FY 2021 24 Note: Capital spend on accrual basis
Slide 25: Increased FY 2021 Outlook for Total Company & Big 3
Increased FY 2021 Outlook for Total Company & Big 3 Feb. 23, 2021 May 4, 2021 Aug. 5, 2021 Nov. 2, 2021 Total Thomson Reuters FY Outlook(1) FY Outlook(1) FY Outlook(1) FY Outlook(1) Total Revenue Growth 3.0% - 4.0% 3.5% - 4.0% 4.0% - 4.5% 4.5% - 5.0% Organic Revenue Growth 3.0% - 4.0% 3.5% - 4.0% 4.
Slide 26: Q&A
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