Thomson Reuters
Reports Third-Quarter 2021 Results
TORONTO, Nov. 2, 2021 /PRNewswire/ -- Thomson Reuters
(TSX/NYSE: TRI) today reported results for the third quarter ended
September 30, 2021:
- Total company revenue up 6% / organic revenue up 5%
- Revenue for four of five business segments grew 6%
organically
- Raised full-year 2021 revenue guidance
- Total company revenue forecast increased to 4.5% - 5.0% from
4.0% - 4.5%
- "Big 3" segments revenue forecast increased to approximately
6.0% from 5.5% - 6.0%
- Raised full-year 2021 free cash flow guidance to approximately
$1.2 billion from $1.1 - $1.2
billion
- Reaffirmed full-year 2022 and 2023 guidance, with minor
adjustments to 2022 Change Program spend
- Change Program on track - achieved $132
million run-rate operating expense savings through
September 30
- Repurchased $1.1 billion of
company shares under $1.2 billion
buyback program through October
31
"The momentum we saw in the first half of the year continued
into the third quarter with revenue and sales performance above our
expectations and consistent across the business. This strong
performance reflects how our products fit the needs of our
customers, enabling them to better serve their own clients in a
rapidly changing workplace. It also demonstrates our leading
positions in healthy and growing markets. Based on our strong
financial performance and our confidence in the trajectory of the
business for the remainder of the year, we have again increased our
full-year 2021 revenue guidance," said Steve Hasker, president and CEO of Thomson
Reuters.
Mr. Hasker added, "While the third quarter was another strong
one, we still have a lot to achieve. We are focused on building a
leading content-driven technology company, and our talented teams
continue to work ambitiously towards that goal. I am very pleased
with our achievements to date and believe we are well positioned to
build on this progress in 2022."
Consolidated Financial Highlights -
Three Months Ended September 30
Three Months Ended
September 30,
(Millions of U.S. dollars, except for adjusted EBITDA margin and
EPS)
(unaudited) |
IFRS Financial Measures(1) |
2021 |
2020 |
Change |
Change at
Constant
Currency |
Revenues |
$1,526 |
$1,443 |
6% |
|
Operating profit |
$282 |
$318 |
-11% |
|
Diluted (loss) earnings per share (EPS) |
$(0.49) |
$0.48 |
n/m |
|
Net cash provided by operating activities |
$534 |
$581 |
-9% |
|
Non-IFRS Financial
Measures(1) |
|
|
|
|
Revenues |
$1,526 |
$1,443 |
6% |
5% |
Adjusted EBITDA |
$458 |
$491 |
-7% |
-7% |
Adjusted EBITDA margin |
30.0% |
34.0% |
-400bp |
-410bp |
Adjusted EPS |
$0.46 |
$0.39 |
18% |
15% |
Free cash flow |
$383 |
$541 |
-30% |
|
(1) In addition to results reported in accordance
with International Financial Reporting Standards (IFRS), the
company uses certain non-IFRS
financial measures as supplemental indicators of its operating
performance and financial position. These and other non-IFRS
financial
measures are defined and reconciled to the most directly comparable
IFRS measures in the tables appended to this news release.
n/m: not meaningful |
Revenues increased 6%, driven by growth across four of
the company's five business segments and a 1% favorable impact from
foreign currency.
- Organic revenues increased 5%, driven by 6% growth in recurring
revenues (81% of total revenues), as well as 8% growth in
transactions revenues. Global Print revenues declined.
- The company's "Big 3" segments (Legal Professionals, Corporates
and Tax & Accounting Professionals), which collectively
comprised 79% of total revenues, reported organic revenue growth of
6%.
Operating profit decreased 11% as the prior-year period
included a significant benefit from the revaluation of warrants
that the company previously held in Refinitiv, which was sold to
London Stock Exchange Group (LSEG) in January 2021. Higher revenues and lower
depreciation and amortization more than offset higher costs which
included costs associated with the company's Change Program.
Additional information regarding the Change Program is provided
later in this news release.
- Adjusted EBITDA, which excludes the impact of the
warrant revaluation among other items, declined 7% as higher
revenues were more than offset by higher costs, which included
costs associated with the company's Change Program. The related
margin decreased to 30.0% from 34.0% primarily because costs from
the Change Program negatively impacted the margin by
350bp.
Diluted loss per share of $0.49 was due to a decrease in value of the
company's LSEG investment as compared to diluted earnings per share
of $0.48 in the prior-year
period.
- Adjusted EPS, which excludes the change in value of the
company's LSEG investment, as well as other adjustments, increased
to $0.46 per share from $0.39 per share in the prior-year period as lower
depreciation and amortization and lower income taxes offset lower
adjusted EBITDA.
Net cash provided by operating activities decreased as
higher revenues were more than offset by higher expenses, which
included Change Program costs, and higher tax payments.
- Free cash flow decreased due to lower cash flow
from operating activities and because the prior-year period
included proceeds from the sale of real estate.
Highlights by Customer Segment - Three
Months Ended September 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
Three Months Ended |
|
|
|
|
|
September
30, |
|
Change |
|
|
2021 |
2020 |
|
Total |
Constant
Currency |
Organic(1) |
Revenues |
|
|
|
|
|
|
|
Legal Professionals |
|
$682 |
$636 |
|
7% |
6% |
6% |
Corporates |
|
356 |
333 |
|
7% |
6% |
6% |
Tax & Accounting Professionals |
|
175 |
165 |
|
6% |
6% |
6% |
"Big 3" Segments Combined |
|
1,213 |
1,134 |
|
7% |
6% |
6% |
Reuters News |
|
164 |
154 |
|
6% |
6% |
6% |
Global Print |
|
149 |
154 |
|
-3% |
-5% |
-5% |
Eliminations/Rounding |
|
- |
1 |
|
|
|
|
Revenues |
|
$1,526 |
$1,443 |
|
6% |
5% |
5% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Legal Professionals |
|
$288 |
$272 |
|
6% |
4% |
|
Corporates |
|
131 |
120 |
|
9% |
9% |
|
Tax & Accounting Professionals |
|
49 |
47 |
|
4% |
6% |
|
"Big 3" Segments Combined |
|
468 |
439 |
|
7% |
6% |
|
Reuters News |
|
25 |
23 |
|
4% |
8% |
|
Global Print |
|
52 |
64 |
|
-18% |
-19% |
|
Corporate costs |
|
(87) |
(35) |
|
n/a |
n/a |
|
Adjusted EBITDA |
|
$458 |
$491 |
|
-7% |
-7% |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
Legal Professionals |
|
42.3% |
42.8% |
|
-50bp |
-80bp |
|
Corporates |
|
36.8% |
36.0% |
|
80bp |
80bp |
|
Tax & Accounting Professionals |
|
28.0% |
28.5% |
|
-50bp |
-20bp |
|
"Big 3" Segments Combined |
|
38.6% |
38.7% |
|
-10bp |
-20bp |
|
Reuters News |
|
14.9% |
15.2% |
|
-30bp |
20bp |
|
Global Print |
|
35.0% |
41.1% |
|
-610bp |
-630bp |
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
|
Adjusted EBITDA margin |
|
30.0% |
34.0% |
|
-400bp |
-410bp |
|
|
n/a: not
applicable
(1) Computed for revenue growth only. |
Unless otherwise noted, all revenue
growth comparisons by customer segment in this news release are at
constant currency (or exclude the impact of foreign
currency) as Thomson Reuters believes this provides the best basis
to measure their performance.
Legal Professionals
Revenues increased 6% (all organic) to $682 million.
- Recurring revenues grew 6% (93% of total, all organic),
primarily due to strong performances from Practical Law, Westlaw
Edge, FindLaw and the Government business as well as contributions
from the company's Canadian, European and Asian & Emerging
Markets businesses.
- Transactions revenues grew 10% (7% of total, all organic),
primarily related to Elite, FindLaw and the Government
businesses.
Adjusted EBITDA increased 6% to $288 million.
- The margin decreased to 42.3% from 42.8%, primarily due to
year-over-year timing of expenses such as marketing and selling
costs.
Corporates
Revenues increased 6% (all organic) to $356 million, primarily due to strong recurring
revenue growth, including strong performance from Practical Law,
Indirect Tax and CLEAR as well as contributions from the company's
Latin American and Asian businesses.
- Recurring revenues grew 7% (87% of total, all organic) driven
by Practical Law, Indirect Tax and CLEAR as well as the company's
businesses in Latin America and
Asia & Emerging Markets.
- Transactions revenues grew 2% (13% of total, all organic).
Adjusted EBITDA increased 9% to $131 million.
- The margin increased to 36.8% from 36.0%, primarily due to
higher revenues.
Tax & Accounting Professionals
Revenues increased 6% (all organic) to $175 million, reflecting recurring revenue growth
of 10% and a 9% decline in transactions revenues.
- Recurring revenues grew 10% (84% of total, all organic), driven
by strong growth from the company's Latin American businesses and
audit solutions, which includes Confirmation.
- Transactions revenues decreased 9% (16% of total, all organic),
primarily due to the year-over-year timing of the U.S. federal tax
filing deadlines for individuals moving from the third quarter of
2020 to the second quarter of 2021.
- Normalizing for the shift in the U.S. federal tax filing
deadline, organic revenues increased 11%.
Adjusted EBITDA increased 4% to $49 million.
- The margin decreased to 28.0% from 28.5%, primarily due to the
year-over-year timing of revenue related to the U.S. federal tax
filing deadline.
The Tax & Accounting Professionals segment is the company's
most seasonal business with approximately 60% of full-year revenues
typically generated in the first and fourth quarters. As a result,
the margin performance of this segment has been generally higher in
the first and fourth quarters as costs are typically incurred in a
more linear fashion throughout the year.
Reuters News
Revenues of $164
million increased 6%, all organic, primarily due to the Agency
business and Professional business, including Reuters Events, which
grew over 60% organically compared to the prior-year period, which
was negatively impacted by COVID-19.
- Reuters Events continues to hold nearly all events virtually
and continues to assess when a return to regular in-person events
can resume based on local health guidelines and feedback from
customers.
Adjusted EBITDA increased 4% to $25 million, primarily due to higher
revenues.
Global Print
Revenues decreased 5% to $149 million, as expected. Global Print's
full-year 2021 revenues are forecast to decline between 4% and
6%.
Adjusted EBITDA decreased 18% to $52 million.
- The margin decreased to 35.0% from 41.1% due to decreased
revenues and the dilutive impact of lower margin third-party print
revenue.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
$87 million and included $53 million of Change Program costs. Corporate
costs were $35 million in the
prior-year period. Additional information regarding the Change
Program is provided below.
Consolidated Financial Highlights -
Nine Months Ended September 30
Nine Months Ended
September 30,
(Millions of U.S. dollars, except for adjusted EBITDA margin and
EPS)
(unaudited) |
IFRS Financial Measures(1) |
2021 |
2020 |
Change |
Change at
Constant
Currency |
Revenues |
$4,638 |
$4,368 |
6% |
|
Operating profit |
$985 |
$973 |
1% |
|
Diluted earnings per share (EPS) |
$11.80 |
$1.12 |
n/m |
|
Net cash provided by operating activities |
$1,376 |
$1,179 |
17% |
|
Non-IFRS Financial
Measures(1) |
|
|
|
|
Revenues |
$4,638 |
$4,368 |
6% |
5% |
Adjusted EBITDA |
$1,518 |
$1,450 |
5% |
4% |
Adjusted EBITDA margin |
32.7% |
33.2% |
-50bp |
-30bp |
Adjusted EPS |
$1.52 |
$1.31 |
16% |
15% |
Free cash flow |
$1,001 |
$881 |
13% |
|
(1) In addition to results reported in accordance with
IFRS, the company uses certain non-IFRS financial measures as
supplemental
indicators of its operating performance and financial position.
These and other non-IFRS financial measures are defined and
reconciled
to the most directly comparable IFRS measures in the tables
appended to this news release.
n/m: not meaningful |
Revenues increased 6% related to growth in recurring and
transactions revenues and a 1% favorable impact from foreign
currency.
- Organic revenues increased 5% primarily due to 5% growth in
recurring revenues (79% of total revenues) as well as growth in
transactions revenues. Global Print revenues declined.
- The company's "Big 3" segments, which collectively comprised
80% of total revenues, reported organic revenue growth of 6%.
Operating profit increased 1% as higher revenues helped
to offset higher costs, which included costs associated with the
company's Change Program, as well as a benefit associated with the
revaluation of the Refinitiv warrants in the prior-year period.
- Adjusted EBITDA which excludes the impact of the
warrant revaluation among other items, increased 5% as higher
revenues more than offset higher costs. The related margin
decreased to 32.7% from 33.2% in the prior-year period. Adjusted
EBITDA margin was negatively impacted by 230bp due to Change
Program costs.
Diluted EPS increased to $11.80 per share from $1.12 per share in the prior-year period due to
the gain on the sale of Refinitiv to LSEG in January 2021.
- Adjusted EPS, which excludes the gain on the sale of
Refinitiv, as well as other adjustments, increased to $1.52 per share from $1.31 per share in the prior-year period,
primarily due to higher adjusted EBITDA and lower income tax
expense.
Net cash provided by operating activities increased as
higher revenues and favorable movements in working capital
(including lower annual incentive bonus payments, which were due to
the impact of COVID-19 in 2020) more than offset higher tax
payments and expenses, which included Change Program costs.
- Free cash flow increased as higher cash flows from
operating activities more than offset a prior-year period benefit
from the proceeds associated with the sale of real
estate.
Highlights by Customer Segment - Nine
Months Ended September 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
|
Nine Months Ended |
|
|
|
|
|
|
September 30,
|
|
Change |
|
|
2021 |
2020 |
|
Total |
Constant
Currency |
Organic(1) |
Revenues |
|
|
|
|
|
|
|
Legal Professionals |
|
$2,023 |
$1,882 |
|
7% |
6% |
6% |
Corporates |
|
1,088 |
1,029 |
|
6% |
5% |
5% |
Tax & Accounting Professionals |
|
597 |
551 |
|
8% |
8% |
8% |
"Big 3" Segments Combined |
|
3,708 |
3,462 |
|
7% |
6% |
6% |
Reuters News |
|
492 |
464 |
|
6% |
5% |
5% |
Global Print |
|
439 |
443 |
|
-1% |
-3% |
-3% |
Eliminations/Rounding |
|
(1) |
(1) |
|
|
|
|
Revenues |
|
$4,638 |
$4,368 |
|
6% |
5% |
5% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Legal Professionals |
|
$852 |
$756 |
|
13% |
11% |
|
Corporates |
|
407 |
355 |
|
15% |
14% |
|
Tax & Accounting Professionals |
|
219 |
185 |
|
18% |
18% |
|
"Big 3" Segments Combined |
|
1,478 |
1,296 |
|
14% |
13% |
|
Reuters News |
|
88 |
67 |
|
30% |
44% |
|
Global Print |
|
165 |
181 |
|
-9% |
-11% |
|
Corporate costs |
|
(213) |
(94) |
|
n/a |
n/a |
|
Adjusted EBITDA |
|
$1,518 |
$1,450 |
|
5% |
4% |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
Legal Professionals |
|
42.1% |
40.2% |
|
190bp |
180bp |
|
Corporates |
|
37.4% |
34.5% |
|
290bp |
310bp |
|
Tax & Accounting Professionals |
|
36.6% |
33.6% |
|
300bp |
310bp |
|
"Big 3" Segments Combined |
|
39.9% |
37.4% |
|
250bp |
230bp |
|
Reuters News |
|
17.8% |
14.5% |
|
330bp |
540bp |
|
Global Print |
|
37.5% |
40.7% |
|
-320bp |
-340bp |
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
|
Adjusted EBITDA margin |
|
32.7% |
33.2% |
|
-50bp |
-30bp |
|
|
n/a: not
applicable
(1) Computed for revenue growth only. |
Thomson Reuters Change Program and
Outlook
In February 2021, the company
announced a two-year Change Program to transition from a holding
company to an operating company, and from a content provider to a
content-driven technology company. The program is expected to take
24 months (2021-2022) to largely complete and is projected to
require an investment of between $500
million and $600 million
during the course of that time. The company's 2021, 2022 and 2023
outlook is appended to this release.
The company's three-year outlook incorporates the forecasted
impacts associated with the Change Program, assumes constant
currency rates, and excludes the impact of any future acquisitions
or dispositions that may occur during those periods. Thomson
Reuters believes that this type of guidance provides useful insight
into the performance of its businesses.
While the company's third-quarter 2021 performance provides it
with increasing confidence about its outlook, the global economy
continues to experience substantial disruption due to concerns
regarding resurgences and new strains of COVID-19, as well as from
the measures intended to mitigate its impact. Any worsening of the
global economic or business environment could impact the company's
ability to achieve its outlook.
Today, the company reaffirmed and increased part of its
full-year outlook for 2021, which is reflected in the table below.
The company also reaffirmed its full-year outlook for 2022 and
2023, except for a minor increase to 2022 Change Program spend,
reflecting the carryover of the lower than expected spend in
2021.
Update to
Full-Year 2021 Outlook
Total Thomson Reuters |
Original
FY 2021
Outlook
(February 23, 2021) |
FY 2021
Outlook
Update
(May 4, 2021) |
FY 2021
Outlook
Update
(August 5, 2021) |
FY 2021
Outlook
Update
(November 2, 2021) |
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% |
4.0% - 4.5% |
4.5% - 5.0% |
Adjusted EBITDA Margin |
30% - 31% |
Unchanged |
31% - 32% |
Unchanged |
Corporate Costs
Core Corporate Costs
Change Program Operating Expenses |
$305 - $340 million
$130 - $140 million
$175 - $200 million |
Unchanged |
Unchanged |
$305 - $330 million
Unchanged
$175 - $190 million |
Free Cash Flow |
$1.0 - $1.1 billion |
Unchanged |
$1.1 - $1.2 billion |
~ $1.2 billion |
Capital Expenditures - % of
Revenue
Change Program Capital Expenditures |
9.0% - 9.5%
$125 - $150 million |
Unchanged |
Unchanged |
Unchanged
$115 - $130 million |
Depreciation & Amortization
of
Computer Software |
$650 - $675 million |
Unchanged |
Unchanged |
Unchanged |
Interest Expense (P&L) |
$190 - $210 million |
Unchanged |
Unchanged |
Unchanged |
Effective Tax Rate on Adjusted Earnings |
16% - 18% |
Unchanged |
Unchanged |
14% - 16% |
Big 3 Segments
(Legal Professionals, Corporates and
Tax & Accounting Professionals) |
Original
FY 2021
Outlook
(February 23, 2021) |
FY 2021
Outlook
Update
(May 4, 2021) |
FY 2021
Outlook
Update
(August 5, 2021) |
FY 2021
Outlook
Update
(November 2, 2021) |
Total Revenue Growth |
4.5% - 5.5% |
5.0% - 5.5% |
5.5% - 6.0% |
~ 6.0% |
Organic Revenue Growth |
4.5% - 5.5% |
5.0% - 5.5% |
5.5% - 6.0% |
~ 6.0% |
Adjusted EBITDA Margin |
38% - 39% |
Unchanged |
~ 39% |
Unchanged |
The information in
this section is forward-looking. Actual results, which include the
impact of currency and future acquisitions and dispositions
completed during 2021, 2022 and 2023, may differ materially from
the company's outlook. Some of the forward-looking financial
measures in the outlook above are provided on a non-IFRS basis. See
the section below entitled "Non-IFRS Financial Measures" for more
information. The information in this section should also be read in
conjunction with the section below entitled "Special Note Regarding
Forward-Looking Statements, Material Risks and Material
Assumptions."
Share Repurchases - Update on
$1.2B Buyback Program
In August 2021, Thomson Reuters
announced that it plans to buy back up to $1.2 billion of its common shares. The new
buyback program is in addition to a $200
million repurchase program that was completed earlier this
year.
From August 2021 through
October 31, 2021, the company
repurchased approximately $1.1
billion of its common shares under the new buyback program.
As of October 31, 2021, Thomson
Reuters had approximately 487.1 million common shares
outstanding.
Dividends
In February 2021, the company
announced a $0.10 per share
annualized increase in the dividend to $1.62 per common share, representing the
28th consecutive year of dividend increases. A quarterly
dividend of $0.405 per share is
payable on December 15, 2021 to
common shareholders of record as of November
18, 2021.
London Stock Exchange Group (LSEG)
Ownership Interest
In January 2021, Thomson Reuters
and private equity funds affiliated with Blackstone sold Refinitiv
to LSEG in an all-share transaction. Thomson Reuters indirectly
owns LSEG shares through an entity that it jointly owns with
Blackstone's consortium and a group of current LSEG and former
Refinitiv senior management.
As of October 31, 2021, Thomson
Reuters indirectly owned approximately 72.4 million LSEG shares
which had a market value of approximately $7.1 billion based on LSEG's closing share price
on that day. The company received $51
million of dividends from its LSEG investment in
June 2021 and an additional
$24 million in October 2021.
In March 2021, as permitted under
a lock-up exception, Thomson Reuters sold approximately 10.1
million LSEG shares for pre-tax net proceeds of $994 million. Over the course of 2021, Thomson
Reuters will pay approximately $225
million of tax on the sale of these shares and will use the
after-tax proceeds to pay the approximately $640 million of taxes that became payable when
the Refinitiv sale closed. In the nine-month period ended
September 30, 2021, the company paid
$662 million of taxes related to
these transactions.
Thomson Reuters
Thomson Reuters is a leading provider of business information
services. Our products include highly specialized
information-enabled software and tools for legal, tax, accounting
and compliance professionals combined with the world's most global
news service – Reuters. For more information on Thomson Reuters,
visit tr.com and for the latest world news, reuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its
financial statements in accordance with International Financial
Reporting Standards (IFRS), as issued by the International
Accounting Standards Board (IASB).
This news release includes certain
non-IFRS financial measures, such as adjusted EBITDA and the
related margin (other than at the customer segment level), net debt
to adjusted EBITDA leverage ratio, free cash flow, adjusted EPS,
selected measures excluding the impact of foreign currency, and
changes in revenues computed on an organic basis. Thomson Reuters
uses these non-IFRS financial measures as supplemental indicators
of its operating performance and financial position. These measures
do not have any standardized meanings prescribed by IFRS and
therefore are unlikely to be comparable to the calculation of
similar measures used by other companies, and should not be viewed
as alternatives to measures of financial performance calculated in
accordance with IFRS. Non-IFRS financial measures are defined and
reconciled to the most directly comparable IFRS measures in the
appended tables.
The company's outlook contains
various non-IFRS financial measures. The company believes that
providing reconciliations of forward-looking non-IFRS financial
measures in its outlook would be potentially misleading and not
practical due to the difficulty of projecting items that are not
reflective of ongoing operations in any future period. The
magnitude of these items may be significant. Consequently, for
outlook purposes only, the company is unable to reconcile these
non-IFRS measures to the most comparable IFRS measures because it
cannot predict, with reasonable certainty, the 2021, 2022 and 2023
impacts of changes in foreign exchange rates which impact (i) the
translation of its results reported at average foreign currency
rates for the year, and (ii) other finance income or expense
related to intercompany financing arrangements. Additionally, the
company cannot reasonably predict (i) its share of post-tax
earnings (losses) in equity method investments, which is subject to
changes in the stock price of LSEG or (ii) the occurrence or amount
of other operating gains and losses that generally arise from
business transactions that the company does not currently
anticipate.
ROUNDING
Other than EPS, the company reports
its results in millions of U.S. dollars, but computes percentage
changes and margins using whole dollars to be more precise. As a
result, percentages and margins calculated from reported amounts
may differ from those presented, and growth components may not
total due to rounding.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS
Certain statements in this news
release, including, but not limited to, statements in Mr. Hasker's
comments, the "Thomson Reuters Change Program and Outlook" section,
and the company's expectations regarding Global Print and share
repurchases, are forward-looking. The words "will", "expect",
"believe", "target", "estimate", "could", "should", "intend",
"predict", "project" and similar expressions identify
forward-looking statements. While the company believes that it has
a reasonable basis for making forward-looking statements in this
news release, they are not a guarantee of future performance or
outcomes and there is no assurance that any of the other events
described in any forward-looking statement will materialize.
Forward-looking statements, including those related to the COVID-19
pandemic, are subject to a number of risks, uncertainties and
assumptions that could cause actual results or events to differ
materially from current expectations. Many of these risks,
uncertainties and assumptions are beyond the company's control and
the effects of them can be difficult to predict. In particular, the
full extent of the impact of the COVID-19 pandemic on the company's
business, operations and financial results will depend on numerous
evolving factors that it may not be able to accurately predict.
Some of the material risk factors that could cause actual
results or events to differ materially from those expressed in or
implied by forward-looking statements in this news release include,
but are not limited to, those discussed on pages 16-30 in the "Risk
Factors" section of the company's annual report for the year ended
December 31, 2020. These and other
risk factors are discussed in materials that Thomson Reuters from
time to time files with, or furnishes to, the Canadian securities
regulatory authorities and the U.S. Securities and Exchange
Commission (SEC). Thomson Reuters annual and quarterly reports are
also available in the "Investor Relations" section of
tr.com.
The company's business outlook is based on information
currently available to the company and is based on various external
and internal assumptions made by the company in light of its
experience and perception of historical trends, current conditions
and expected future developments (including those related to the
COVID-19 pandemic), as well as other factors that the company
believes are appropriate under the circumstances. Material
assumptions and material risks may cause actual performance to
differ from the company's expectations underlying its business
outlook, which reflects the global economic crisis caused by the
COVID-19 pandemic. For a discussion of material assumptions and
material risks related to the company's outlook, please see pages
22-23 of the company's second-quarter management's discussion and
analysis (MD&A) for the period ended June 30, 2021. Material assumptions and material
risks related to the company's outlook will also be included in the
company's third-quarter MD&A for the period ended September 30, 2021, expected to be filed shortly.
The company's MD&A is filed with, or furnished to, the Canadian
securities regulatory authorities and the U.S. SEC and is also
available in the "Investor Relations" section of tr.com.
The company has provided an updated
Outlook for the purpose of presenting information about current
expectations for the periods presented. This information may not be
appropriate for other purposes. You are cautioned not to place
undue reliance on forward-looking statements which reflect
expectations only as of the date of this news release.
Except as may be required by
applicable law, Thomson Reuters disclaims any obligation to update
or revise any forward-looking statements, including those related
to the COVID-19 pandemic.
CONTACTS
MEDIA
Melissa Cassar
Head of Commercial Communications & Corporate Affairs
+1 437 388 3619
melissa.cassar@tr.com |
INVESTORS
Frank J. Golden
Head of Investor Relations
+1 332 219 1111
frank.golden@tr.com |
Thomson Reuters will webcast a
discussion of its third-quarter 2021 results and its business
outlook today beginning at 8:30 a.m. Eastern
Daylight Time (EDT). You can access the webcast by visiting
ir.tr.com. An archive of the webcast will be available following
the presentation.
Thomson Reuters
Corporation
2021 - 2023 Outlook
Total Thomson Reuters |
2021
Outlook
Updated |
2022
Outlook
Reaffirmed |
2023
Outlook
Reaffirmed |
Total Revenue Growth |
4.5% - 5.0% |
4.0% - 5.0% |
5.0% - 6.0% |
Organic Revenue Growth |
4.5% - 5.0% |
4.0% - 5.0% |
5.0% - 6.0% |
Adjusted EBITDA Margin |
31% - 32% |
34% - 35% |
38% – 40% |
Corporate Costs
Core Corporate Costs
Change Program Operating Expenses |
$305 - $330 million
$130 - $140 million
$175 - $190 million |
$245 - $290 million
$120 - $130 million
$125 - $160 million |
$110 - $120 million
$110 - $120 million
$0 |
Free Cash Flow |
~ $1.2 billion |
$1.2 - $1.3 billion |
$1.8 - $2.0 billion |
Capital Expenditures - % of
Revenue
Change Program Capital Expenditures |
9.0% - 9.5%
$115 - $130 million |
7.5% - 8.0%
$85 - $120 million |
6.0% - 6.5%
$0 |
Depreciation & Amortization
of
Computer Software |
$650 - $675 million |
$620 - $645 million |
$580 - $605 million |
Interest Expense (P&L) |
$190 - $210 million |
$190 - $210 million |
$190 - $210 million |
Effective Tax Rate on Adjusted Earnings |
14% - 16% |
n/a |
n/a |
Big 3 Segments
(Legal Professionals, Corporates and
Tax & Accounting Professionals) |
2021
Outlook
Updated |
2022
Outlook
Reaffirmed |
2023
Outlook
Reaffirmed |
Total Revenue Growth |
~ 6.0% |
5.5% - 6.5% |
6.0% - 7.0% |
Organic Revenue Growth |
~ 6.0% |
5.5% - 6.5% |
6.0% - 7.0% |
Adjusted EBITDA Margin |
~ 39% |
41% - 42% |
43% - 45% |
The information in
this section is forward-looking. Actual results, which include the
impact of currency and future acquisitions and dispositions
completed during 2021, 2022 and 2023, may differ materially from
the company's outlook. Some of the forward-looking financial
measures in the outlook above are provided on a non-IFRS basis. See
the section above entitled "Non-IFRS Financial Measures" for more
information. The information in this section should also be read in
conjunction with the section above entitled "Special Note Regarding
Forward-Looking Statements, Material Risks and Material
Assumptions."
Thomson Reuters
Corporation |
Consolidated Income
Statement |
(millions of U.S.
dollars, except per share data) |
(unaudited) |
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, |
|
September
30, |
|
|
2021 |
2020 |
|
2021 |
2020 |
|
CONTINUING OPERATIONS |
|
|
|
|
|
|
Revenues |
$1,526 |
$1,443 |
|
$4,638 |
$4,368 |
|
Operating expenses |
(1,060) |
(955) |
|
(3,114) |
(2,901) |
|
Depreciation |
(40) |
(61) |
|
(128) |
(144) |
|
Amortization of computer software |
(119) |
(133) |
|
(356) |
(362) |
|
Amortization of other identifiable intangible
assets |
(29) |
(32) |
|
(90) |
(92) |
|
Other operating gains, net |
4 |
56 |
|
35 |
104 |
|
Operating profit |
282 |
318 |
|
985 |
973 |
|
Finance costs, net: |
|
|
|
|
|
|
Net interest expense |
(46) |
(49) |
|
(146) |
(146) |
|
Other finance income |
34 |
2 |
|
30 |
36 |
|
Income before tax and equity method
investments |
270 |
271 |
|
869 |
863 |
|
Share of post-tax (losses) earnings
in equity method
investments |
(672) |
(178) |
|
6,717 |
(385) |
|
Tax benefit (expense) |
161 |
147 |
|
(1,722) |
84 |
|
(Loss) earnings from continuing
operations |
(241) |
240 |
|
5,864 |
562 |
|
Earnings (loss) from discontinued operations, net
of tax |
1 |
1 |
|
- |
(2) |
|
Net (loss) earnings |
$(240) |
$241 |
|
$5,864 |
$560 |
|
(Loss) earnings attributable to common
shareholders |
$(240) |
$241 |
|
$5,864 |
$560 |
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
Basic (loss) earnings per share: |
|
|
|
|
|
|
From continuing operations |
$(0.49) |
$0.48 |
|
$11.83 |
$1.13 |
|
From discontinued operations |
- |
- |
|
- |
(0.01) |
|
Basic (loss) earnings per share |
$(0.49) |
$0.48 |
|
$11.83 |
$1.12 |
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share: |
|
|
|
|
|
|
From continuing operations |
$(0.49) |
$0.48 |
|
$11.80 |
$1.12 |
|
From discontinued operations |
- |
- |
|
- |
- |
|
Diluted (loss) earnings per share |
$(0.49) |
$0.48 |
|
$11.80 |
$1.12 |
|
|
|
|
|
|
|
|
Basic weighted-average common shares |
494,624,854 |
497,090,942 |
|
495,515,310 |
496,544,202 |
|
Diluted weighted-average common shares |
494,624,854 |
498,433,719 |
|
496,593,404 |
497,828,059 |
|
Thomson Reuters
Corporation |
Consolidated
Statement of Financial Position |
(millions of U.S.
dollars) |
(unaudited) |
|
|
September 30, |
|
December 31, |
2021 |
|
2020 |
Assets |
|
|
|
Cash and cash equivalents |
$1,511 |
|
$1,787 |
Trade and other receivables |
951 |
|
1,151 |
Other financial assets |
83 |
|
612 |
Prepaid expenses and other current assets |
463 |
|
425 |
Current assets |
3,008 |
|
3,975 |
|
|
|
|
Property and equipment, net |
473 |
|
545 |
Computer software, net |
808 |
|
830 |
Other identifiable intangible assets, net |
3,359 |
|
3,427 |
Goodwill |
5,935 |
|
5,976 |
Equity method investments |
7,225 |
|
1,136 |
Other non-current assets |
1,148 |
|
788 |
Deferred tax |
1,143 |
|
1,204 |
Total assets |
$23,099 |
|
$17,881 |
|
|
|
|
Liabilities and equity |
|
|
|
Liabilities |
|
|
|
Payables, accruals and provisions |
$1,226 |
|
$1,159 |
Current tax liabilities |
398 |
|
251 |
Deferred revenue |
838 |
|
866 |
Other financial liabilities |
649 |
|
376 |
Current liabilities |
3,111 |
|
2,652 |
|
|
|
|
Long-term indebtedness |
3,782 |
|
3,772 |
Provisions and other non-current liabilities |
971 |
|
1,083 |
Deferred tax |
1,044 |
|
394 |
Total liabilities |
8,908 |
|
7,901 |
|
|
|
|
Equity |
|
|
|
Capital |
5,463 |
|
5,458 |
Retained earnings |
9,550 |
|
5,211 |
Accumulated other comprehensive loss |
(822) |
|
(689) |
Total equity |
14,191 |
|
9,980 |
Total liabilities and equity |
$23,099 |
|
$17,881 |
Thomson Reuters
Corporation |
Consolidated
Statement of Cash Flow |
(millions of U.S.
dollars) |
(unaudited) |
|
|
|
|
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
2021 |
2020 |
|
2021 |
2020 |
Cash provided by (used in): |
|
|
|
|
|
Operating activities |
|
|
|
|
|
(Loss) earnings from continuing operations |
$(241) |
$240 |
|
$5,864 |
$562 |
Adjustments for: |
|
|
|
|
|
Depreciation |
40 |
61 |
|
128 |
144 |
Amortization of computer software |
119 |
133 |
|
356 |
362 |
Amortization of other identifiable intangible
assets |
29 |
32 |
|
90 |
92 |
Share of post-tax losses (earnings) in equity
method investments |
672 |
178 |
|
(6,717) |
385 |
Deferred tax |
(153) |
(153) |
|
770 |
(190) |
Other |
(7) |
(10) |
|
56 |
(16) |
Changes in working capital and other
items |
101 |
103 |
|
901 |
(147) |
Operating cash flows from continuing
operations |
560 |
584 |
|
1,448 |
1,192 |
Operating cash flows from discontinued
operations |
(26) |
(3) |
|
(72) |
(13) |
Net cash provided by operating activities |
534 |
581 |
|
1,376 |
1,179 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Acquisitions, net of cash acquired |
(2) |
(43) |
|
(5) |
(165) |
Proceeds from disposals of businesses and
investments |
13 |
- |
|
28 |
1 |
Dividend from sale of LSEG shares |
- |
- |
|
994 |
- |
Capital expenditures |
(131) |
(117) |
|
(364) |
(404) |
Proceeds from disposals of property and
equipment |
- |
98 |
|
- |
162 |
Other investing activities |
3 |
- |
|
56 |
2 |
Taxes paid on sale of Refinitiv and LSEG
shares |
(218) |
- |
|
(662) |
- |
Investing cash flows from continuing
operations |
(335) |
(62) |
|
47 |
(404) |
Investing cash flows from discontinued
operations |
(210) |
- |
|
(252) |
- |
Net cash used in investing activities |
(545) |
(62) |
|
(205) |
(404) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from debt |
- |
- |
|
- |
2,019 |
Repayments of debt |
- |
- |
|
- |
(1,645) |
Net borrowings under short-term loan
facilities |
- |
(120) |
|
- |
(2) |
Payments of lease principal |
(22) |
(20) |
|
(65) |
(56) |
Repurchases of common shares |
(603) |
- |
|
(803) |
(200) |
Dividends paid on preference shares |
(1) |
(1) |
|
(2) |
(2) |
Dividends paid on common shares |
(194) |
(183) |
|
(582) |
(547) |
Other financing activities |
3 |
6 |
|
8 |
(10) |
Net cash used in financing activities |
(817) |
(318) |
|
(1,444) |
(443) |
(Decrease) increase in cash and bank
overdrafts |
(828) |
201 |
|
(273) |
332 |
Translation adjustments |
(3) |
5 |
|
(3) |
(5) |
Cash and bank overdrafts at beginning of
period |
2,342 |
946 |
|
1,787 |
825 |
Cash and bank overdrafts at end of period |
$1,511 |
$1,152 |
|
$1,511 |
$1,152 |
Cash and bank overdrafts at end of period
comprised of: |
|
|
|
|
|
Cash and cash equivalents |
$1,511 |
$1,152 |
|
$1,511 |
$1,152 |
Thomson Reuters Corporation |
Reconciliation of
(Loss) Earnings from Continuing Operations to Adjusted
EBITDA(1) |
(millions of U.S.
dollars, except for margins) |
(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September
30, |
|
September
30, |
|
|
|
2021 |
2020 |
|
2021 |
2020 |
|
|
|
|
|
|
|
|
|
|
(Loss) earnings from continuing
operations |
$(241) |
$240 |
|
$5,864 |
$562 |
|
|
Adjustments to remove: |
|
|
|
|
|
|
|
Tax (benefit) expense |
(161) |
(147) |
|
1,722 |
(84) |
|
|
Other finance income |
(34) |
(2) |
|
(30) |
(36) |
|
|
Net interest expense |
46 |
49 |
|
146 |
146 |
|
|
Amortization of other identifiable intangible
assets |
29 |
32 |
|
90 |
92 |
|
|
Amortization of computer software |
119 |
133 |
|
356 |
362 |
|
|
Depreciation |
40 |
61 |
|
128 |
144 |
|
|
EBITDA |
$(202) |
$366 |
|
$8,276 |
$1,186 |
|
|
Adjustments to remove: |
|
|
|
|
|
|
|
Share of post-tax losses (earnings) in equity
method investments |
672 |
178 |
|
(6,717) |
385 |
|
|
Other operating gains, net |
(4) |
(56) |
|
(35) |
(104) |
|
|
Fair value adjustments(4) |
(8) |
3 |
|
(6) |
(17) |
|
|
Adjusted EBITDA(1) |
$458 |
$491 |
|
$1,518 |
$1,450 |
|
|
Adjusted EBITDA margin(1) |
30.0% |
34.0% |
|
32.7% |
33.2% |
|
|
Thomson Reuters
Corporation |
Reconciliation of
Net (Loss) Earnings to Adjusted Earnings(2) |
Reconciliation of
Total Change in Adjusted EPS(2) to Change in
Constant Currency(5) |
(millions of U.S.
dollars, except for share and per share data) |
(unaudited) |
|
|
Three
Months Ended
September 30, |
|
Nine
Months Ended
September 30, |
|
|
|
2021 |
2020 |
Change |
|
2021 |
2020 |
Change |
Net (loss) earnings |
$(240) |
$241 |
|
|
$5,864 |
$560 |
|
Adjustments to remove: |
|
|
|
|
|
|
|
Fair value adjustments (4) |
(8) |
3 |
|
|
(6) |
(17) |
|
Amortization of other identifiable intangible
assets |
29 |
32 |
|
|
90 |
92 |
|
Other operating gains, net |
(4) |
(56) |
|
|
(35) |
(104) |
|
Other finance income |
(34) |
(2) |
|
|
(30) |
(36) |
|
Share of post-tax losses (earnings) in equity
method investments |
672 |
178 |
|
|
(6,717) |
385 |
|
Tax on above items |
(174) |
(41) |
|
|
1,616 |
(100) |
|
Tax items impacting comparability |
(4) |
(146) |
|
|
(15) |
(107) |
|
(Earnings) loss from discontinued operations, net
of tax |
(1) |
(1) |
|
|
- |
2 |
|
Interim period effective tax rate
normalization(3) |
(8) |
(15) |
|
|
(10) |
(21) |
|
Dividends declared on preference shares |
(1) |
(1) |
|
|
(2) |
(2) |
|
Adjusted earnings(2) |
$227 |
$192 |
|
|
$755 |
$652 |
|
Adjusted EPS (2) |
$0.46 |
$0.39 |
18% |
|
$1.52 |
$1.31 |
16% |
Foreign currency(5) |
|
|
3% |
|
|
|
1% |
Constant currency(5) |
|
|
15% |
|
|
|
15% |
|
|
|
|
|
|
|
|
Diluted weighted-average common shares
(millions)(2) |
495.9 |
498.4 |
|
|
496.6 |
497.8 |
|
Refer to page 23 for footnotes.
Thomson Reuters
Corporation |
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow(6) |
|
(millions of U.S.
dollars) |
|
(unaudited) |
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September
30, |
|
September
30, |
|
2021 |
2020 |
|
2021 |
2020 |
Net cash provided by operating
activities |
$534 |
$581 |
|
$1,376 |
$1,179 |
Capital expenditures |
(131) |
(117) |
|
(364) |
(404) |
Proceeds from disposals of property and
equipment |
- |
98 |
|
- |
162 |
Other investing activities |
3 |
- |
|
56 |
2 |
Payments of lease principal |
(22) |
(20) |
|
(65) |
(56) |
Dividends paid on preference shares |
(1) |
(1) |
|
(2) |
(2) |
Free cash flow (6) |
$383 |
$541 |
|
$1,001 |
$881 |
|
|
|
|
|
|
|
Thomson Reuters
Corporation |
Reconciliation of
Net Debt and Leverage Ratio of Net Debt to Adjusted
EBITDA(8) |
(millions of U.S.
dollars) |
(unaudited) |
|
|
|
September 30,
2021 |
Long-term indebtedness |
|
$3,782 |
Total debt |
|
3,782 |
Swaps |
|
(97) |
Total debt after swaps |
|
3,685 |
Remove fair value adjustments for hedges |
|
(9) |
Total debt after currency arrangements |
|
3,676 |
Remove transaction costs, premiums or discounts
included in the carrying value of debt |
|
35 |
Add: lease liabilities (current and
non-current) |
|
268 |
Less: cash and cash equivalents |
|
(1,511) |
Net debt (8) |
|
$2,468 |
|
|
|
Adjusted EBITDA(1)* |
|
$2,043 |
Net Debt / Adjusted
EBITDA(8)* |
|
1.2:1 |
* The company's target leverage ratio of 2.5:1 is a non-IFRS
measure. For purposes of this calculation, adjusted EBITDA is
computed on a rolling 12-month basis and includes adjusted EBITDA
of $458 million, $502 million, $558
million and $525 million for
the three months ended September 30,
2021, June 30, 2021,
March 31, 2021 and December 31, 2020, respectively. Refer to the
tables appended to this news release, the company's 2020 annual
report and the company's MD&A for the three months ended
June 30, 2021 and March 31, 2021 for additional information
regarding the calculation of adjusted EBITDA in each of these
periods.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation |
Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant
Currency(5) and Organic Basis(7) |
(millions of U.S.
dollars) |
(unaudited) |
|
|
|
Three Months
Ended |
|
|
|
|
September
30, |
|
Change |
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
SUBTOTAL
Constant
Currency(5) |
Acquisitions/
(Divestitures) |
Organic(7) |
Total Revenues |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$682 |
$636 |
|
7% |
1% |
6% |
0% |
6% |
Corporates |
|
356 |
333 |
|
7% |
1% |
6% |
0% |
6% |
Tax & Accounting Professionals |
|
175 |
165 |
|
6% |
0% |
6% |
0% |
6% |
"Big 3" Segments Combined |
|
1,213 |
1,134 |
|
7% |
1% |
6% |
0% |
6% |
Reuters News |
|
164 |
154 |
|
6% |
0% |
6% |
0% |
6% |
Global Print |
|
149 |
154 |
|
-3% |
1% |
-5% |
0% |
-5% |
Eliminations/Rounding |
|
- |
1 |
|
|
|
|
|
|
Revenues |
|
$1,526 |
$1,443 |
|
6% |
1% |
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
Recurring Revenues |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$634 |
$592 |
|
7% |
1% |
6% |
0% |
6% |
Corporates |
|
309 |
287 |
|
8% |
1% |
7% |
0% |
7% |
Tax & Accounting Professionals |
|
147 |
133 |
|
10% |
0% |
10% |
0% |
10% |
"Big 3" Segments Combined |
|
1,090 |
1,012 |
|
8% |
1% |
7% |
0% |
7% |
Reuters News |
|
143 |
141 |
|
1% |
0% |
1% |
0% |
1% |
Total Recurring Revenues |
|
$1,233 |
$1,153 |
|
7% |
1% |
6% |
0% |
6% |
|
|
|
|
|
|
|
|
|
|
Transactions Revenues |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$48 |
$44 |
|
11% |
1% |
10% |
-1% |
10% |
Corporates |
|
47 |
46 |
|
2% |
0% |
2% |
0% |
2% |
Tax & Accounting Professionals |
|
28 |
32 |
|
-9% |
0% |
-9% |
0% |
-9% |
"Big 3" Segments Combined |
|
123 |
122 |
|
2% |
1% |
2% |
0% |
2% |
Reuters News |
|
21 |
13 |
|
62% |
-5% |
66% |
0% |
66% |
Total Transactions Revenues |
|
$144 |
$135 |
|
8% |
0% |
8% |
0% |
8% |
|
|
|
|
|
|
|
|
Growth percentages are computed using
whole dollars. As a result, percentages calculated from reported
amounts may differ from those presented, and growth components may
not total due to rounding.
Refer to page 23 for footnotes.
Thomson Reuters Corporation |
|
Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant
Currency(5) and Organic Basis(7) |
|
(millions of U.S.
dollars) |
|
(unaudited) |
|
|
|
|
|
|
Nine Months
Ended |
|
|
|
|
|
|
|
|
|
|
September
30, |
|
Change |
|
|
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
SUBTOTAL
Constant
Currency(5) |
Acquisitions/
(Divestitures) |
Organic(7) |
|
|
Total Revenues |
|
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$2,023 |
$1,882 |
|
7% |
1% |
6% |
0% |
6% |
|
|
Corporates |
|
1,088 |
1,029 |
|
6% |
1% |
5% |
0% |
5% |
|
|
Tax & Accounting
Professionals |
|
597 |
551 |
|
8% |
0% |
8% |
0% |
8% |
|
|
"Big 3" Segments Combined |
|
3,708 |
3,462 |
|
7% |
1% |
6% |
0% |
6% |
|
|
Reuters News |
|
492 |
464 |
|
6% |
1% |
5% |
0% |
5% |
|
|
Global Print |
|
439 |
443 |
|
-1% |
2% |
-3% |
0% |
-3% |
|
|
Eliminations/Rounding |
|
(1) |
(1) |
|
|
|
|
|
|
|
|
Revenues |
|
$4,638 |
$4,368 |
|
6% |
1% |
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring Revenues |
|
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$1,881 |
$1,759 |
|
7% |
1% |
6% |
0% |
5% |
|
|
Corporates |
|
904 |
850 |
|
6% |
1% |
5% |
0% |
5% |
|
|
Tax & Accounting
Professionals |
|
457 |
427 |
|
7% |
0% |
7% |
0% |
7% |
|
|
"Big 3" Segments Combined |
|
3,242 |
3,036 |
|
7% |
1% |
6% |
0% |
6% |
|
|
Reuters News |
|
431 |
424 |
|
2% |
1% |
0% |
0% |
0% |
|
|
Total Recurring Revenues |
|
$3,673 |
$3,460 |
|
6% |
1% |
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions Revenues |
|
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$142 |
$123 |
|
16% |
3% |
14% |
0% |
14% |
|
|
Corporates |
|
184 |
179 |
|
3% |
0% |
3% |
0% |
3% |
|
|
Tax & Accounting
Professionals |
|
140 |
124 |
|
13% |
1% |
12% |
0% |
12% |
|
|
"Big 3" Segments Combined |
|
466 |
426 |
|
10% |
1% |
9% |
0% |
9% |
|
|
Reuters News |
|
61 |
40 |
|
52% |
2% |
50% |
1% |
50% |
|
|
Total Transactions
Revenues |
|
$527 |
$466 |
|
13% |
1% |
12% |
0% |
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth percentages are computed using
whole dollars. As a result, percentages calculated from reported
amounts may differ from those presented, and growth components may
not total due to rounding.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation |
|
Reconciliation of
Changes in Adjusted EBITDA(1) to Changes on a Constant
Currency Basis(5) |
|
(millions of U.S.
dollars) |
|
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
|
September
30, |
|
Change |
|
|
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
Constant
Currency(5) |
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$288 |
$272 |
|
6% |
2% |
4% |
|
|
Corporates |
|
131 |
120 |
|
9% |
1% |
9% |
|
|
Tax & Accounting
Professionals |
|
49 |
47 |
|
4% |
-1% |
6% |
|
|
"Big 3" Segments Combined |
|
468 |
439 |
|
7% |
1% |
6% |
|
|
Reuters News |
|
25 |
23 |
|
4% |
-4% |
8% |
|
|
Global Print |
|
52 |
64 |
|
-18% |
1% |
-19% |
|
|
Corporate costs |
|
(87) |
(35) |
|
n/a |
n/a |
n/a |
|
|
Adjusted EBITDA |
|
$458 |
$491 |
|
-7% |
1% |
-7% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
42.3% |
42.8% |
|
-50bp |
30bp |
-80bp |
|
|
Corporates |
|
36.8% |
36.0% |
|
80bp |
0bp |
80bp |
|
|
Tax & Accounting
Professionals |
|
28.0% |
28.5% |
|
-50bp |
-30bp |
-20bp |
|
|
"Big 3" Segments Combined |
|
38.6% |
38.7% |
|
-10bp |
10bp |
-20bp |
|
|
Reuters News |
|
14.9% |
15.2% |
|
-30bp |
-50bp |
20bp |
|
|
Global Print |
|
35.0% |
41.1% |
|
-610bp |
20bp |
-630bp |
|
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
|
|
Adjusted EBITDA margin |
|
30.0% |
34.0% |
|
-400bp |
10bp |
-410bp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/a: not applicable
Growth percentages and margins are
computed using whole dollars. As a result, percentages and margins
calculated from reported amounts may differ from those presented,
and growth components may not total due to rounding.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation |
|
Reconciliation of
Changes in Adjusted EBITDA(1) to Changes on a Constant
Currency Basis(5) |
|
(millions of U.S.
dollars) |
|
(unaudited) |
|
|
|
|
|
|
Nine Months
Ended |
|
|
|
|
|
|
|
September
30, |
|
Change |
|
|
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
Constant
Currency(5) |
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$852 |
$756 |
|
13% |
2% |
11% |
|
|
Corporates |
|
407 |
355 |
|
15% |
1% |
14% |
|
|
Tax & Accounting
Professionals |
|
219 |
185 |
|
18% |
0% |
18% |
|
|
"Big 3" Segments Combined |
|
1,478 |
1,296 |
|
14% |
1% |
13% |
|
|
Reuters News |
|
88 |
67 |
|
30% |
-14% |
44% |
|
|
Global Print |
|
165 |
181 |
|
-9% |
2% |
-11% |
|
|
Corporate costs |
|
(213) |
(94) |
|
n/a |
n/a |
n/a |
|
|
Adjusted EBITDA |
|
$1,518 |
$1,450 |
|
5% |
1% |
4% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin |
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
42.1% |
40.2% |
|
190bp |
10bp |
180bp |
|
|
Corporates |
|
37.4% |
34.5% |
|
290bp |
-20bp |
310bp |
|
|
Tax & Accounting
Professionals |
|
36.6% |
33.6% |
|
300bp |
-10bp |
310bp |
|
|
"Big 3" Segments Combined |
|
39.9% |
37.4% |
|
250bp |
20bp |
230bp |
|
|
Reuters News |
|
17.8% |
14.5% |
|
330bp |
-210bp |
540bp |
|
|
Global Print |
|
37.5% |
40.7% |
|
-320bp |
20bp |
-340bp |
|
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
|
|
Adjusted EBITDA margin |
|
32.7% |
33.2% |
|
-50bp |
-20bp |
-30bp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/a: not applicable
Growth percentages and margins are
computed using whole dollars. As a result, percentages and margins
calculated from reported amounts may differ from those presented,
and growth components may not total due to rounding.
Refer to page 23 for footnotes.
Footnotes
(1) |
Thomson Reuters defines adjusted EBITDA for its
business segments as earnings or losses from continuing operations
before tax expense or benefit, net interest expense, other finance
costs or income, depreciation, amortization of software and other
identifiable intangible assets, Thomson Reuters share of post-tax
earnings or losses in equity method investments, other operating
gains and losses, certain asset impairment charges, fair value
adjustments and corporate related items. Consolidated adjusted
EBITDA is comprised of adjusted EBITDA for its business segments
and corporate costs. Adjusted EBITDA margin is adjusted EBITDA
expressed as a percentage of revenues. Thomson Reuters uses
adjusted EBITDA because it provides a consistent basis to evaluate
operating profitability and performance trends by excluding items
that the company does not consider to be controllable activities
for this purpose. Adjusted EBITDA also represents a measure
commonly reported and widely used by investors as a valuation
metric. Additionally, this measure is used by Thomson Reuters and
investors to assess a company's ability to incur and service
debt. |
|
|
(2) |
Thomson Reuters defines adjusted earnings as net
earnings or loss including dividends declared on preference shares
but excluding the post-tax impacts of fair value adjustments,
amortization of other identifiable intangible assets, other
operating gains and losses, certain asset impairment charges, other
finance costs or income, Thomson Reuters share of post-tax earnings
or losses in equity method investments, discontinued operations and
other items affecting comparability. Thomson Reuters calculates the
post-tax amount of each item excluded from adjusted earnings based
on the specific tax rules and tax rates associated with the nature
and jurisdiction of each item. Adjusted EPS is calculated from
adjusted earnings using diluted weighted-average shares and does
not represent actual earnings or loss per share attributable to
shareholders. Thomson Reuters uses adjusted earnings and adjusted
EPS as they provide a more comparable basis to analyze earnings and
they are also measures commonly used by shareholders to measure the
company's performance. |
|
|
|
Because Thomson Reuters reported a net loss for
continuing operations under IFRS for the three months ended
September 30, 2021, the weighted-average number of common shares
used for basic and diluted loss per share is the same for all
per-share calculations in the period, as the effect of stock
options and other equity incentive awards would reduce the loss per
share, and therefore be anti-dilutive. Since the company's non-IFRS
measure "adjusted earnings" is a profit, potential common shares
are included, as they lower adjusted EPS and are therefore
dilutive. |
|
|
|
The following table reconciles IFRS and non-IFRS
common share information: |
|
|
|
(weighted-average common
shares) |
Three Months Ended
September 30, 2021 |
|
|
|
|
IFRS: Basic and Diluted |
494,624,854 |
|
Effect of stock options and
other equity incentive awards |
1,275,150 |
|
Non-IFRS Diluted |
495,900,004 |
|
|
|
(3) |
Adjustment to reflect income taxes based on
estimated full-year effective tax rate. Earnings or losses for
interim periods under IFRS reflect income taxes based on the
estimated effective tax rates of each of the jurisdictions in which
Thomson Reuters operates. The non-IFRS adjustment reallocates
estimated full-year income taxes between interim periods but has no
effect on full-year income taxes. |
|
|
(4) |
Fair value adjustments primarily represent gains
or losses due to changes in foreign currency exchange rates on
intercompany balances that arise in the ordinary course of
business. |
|
|
(5) |
The changes in revenues, adjusted EBITDA and the
related margins, and adjusted earnings per share before currency
(at constant currency or excluding the effects of currency) are
determined by converting the current and prior-year period's local
currency equivalent using the same exchange rates. |
|
|
(6) |
Free cash flow is net cash provided by operating
activities, proceeds from disposals of property and equipment, and
other investing activities less capital expenditures, payments of
lease principal and dividends paid on the company's preference
shares. Thomson Reuters uses free cash flow as it helps assess the
company's ability, over the long term, to create value for its
shareholders as it represents cash available to repay debt, pay
common dividends and fund share repurchases and new
acquisitions. |
|
|
(7) |
Represents changes in revenues of our existing
businesses at constant currency. The metric excludes the distortive
impacts of acquisitions and dispositions from not owning the
business in both comparable periods. Thomson Reuters uses organic
growth because it provides further insight into the performance of
its existing businesses by excluding distortive impacts and serves
as a better measure of the company's ability to grow its business
over the long term. |
|
|
(8) |
Net debt is total indebtedness (excluding the
associated unamortized transaction costs and premiums or discounts)
plus the currency related fair value of associated hedging
instruments, and lease liabilities less cash and cash equivalents.
For purposes of calculating the leverage ratio, net debt is divided
by adjusted EBITDA for the previous twelve-month period ending with
the current fiscal quarter. |