Thomson Reuters
Reports Second-Quarter 2021 Results
TORONTO, Aug. 5, 2021 /PRNewswire/ -- Thomson Reuters
(TSX/NYSE: TRI) today reported results for the second quarter ended
June 30, 2021:
- Total company revenue grew 9% and organic revenue grew 7%;
- Raised full-year 2021 total company and "Big 3" guidance for
revenue growth, adjusted EBITDA margin and free cash flow;
- Outlook provided for the third quarter of 2021;
- Change Program on track - achieved $90
million of run-rate operating expense savings through
June 30;
- New $1.2 billion buyback program
announced.
"The strong results that we achieved in the first quarter
accelerated in the second quarter. Our performance was consistent
across the company, above our expectations, and positions us well
for the rest of the year and 2022. These results reflect the
confidence of our customers – in both an improving economic
environment and in their prospects. This dynamic presents us with a
tailwind as customers are spending on products and solutions that
fit their workflows and improve their professional lives, which are
rapidly evolving," said Steve
Hasker, president and CEO of Thomson Reuters.
Mr. Hasker added, "Based on the strong first-half performance
and our confidence in the trajectory of the business for second
half of the year, we have increased our full-year 2021
guidance."
Consolidated Financial Highlights -
Three Months Ended June 30
Three Months Ended
June 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 |
$1,532 |
$1,405 |
9% |
|
Operating profit |
$316 |
$365 |
-14% |
|
Diluted earnings per share (EPS) |
$2.15 |
$0.25 |
n/m |
|
Cash flow from operations |
$462 |
$422 |
10% |
|
Non-IFRS Financial
Measures(1) |
|
|
|
|
Revenues |
$1,532 |
$1,405 |
9% |
7% |
Adjusted EBITDA |
$502 |
$479 |
5% |
5% |
Adjusted EBITDA margin |
32.7% |
34.1% |
-140bp |
-70bp |
Adjusted EPS |
$0.48 |
$0.44 |
9% |
9% |
Free cash flow |
$379 |
$305 |
25% |
|
(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 9%, driven by growth across all of the
company's customer segments and a 2% favorable impact from foreign
currency.
- Organic revenues increased 7%, driven by 5% growth in recurring
revenues (79% of total revenues), as well as growth in
transactions, Reuters News and Global Print revenues, which
benefited from a favorable comparison to the second quarter of 2020
when the early stages of the COVID-19 pandemic negatively impacted
results.
- The company's "Big 3" segments (Legal Professionals, Corporates
and Tax & Accounting Professionals), which collectively
comprised 80% of total revenues, reported organic revenue growth of
7%.
Operating profit decreased 14% 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.
- Adjusted EBITDA, which excludes the impact of the
warrant revaluation, among other items, increased 5% as higher
revenues more than offset higher costs, which included costs
associated with the company's Change Program. The related margin
decreased to 32.7% from 34.1% in the prior-year period due to
higher costs. Adjusted EBITDA margin was negatively impacted by
270bp due to Change Program costs. Additional information
regarding the Change Program is provided later in this news
release.
Diluted EPS increased to $2.15 per share from $0.25 per share in the prior-year period due to
an increase in the value of the company's LSEG investment.
- Adjusted EPS, which excludes the increase in value of
the company's LSEG investment, as well as other adjustments,
increased to $0.48 per share from
$0.44 per share in the prior-year
period, primarily due to higher adjusted EBITDA.
Cash flow from operations increased as higher revenues
and favorable movements in working capital more than offset higher
tax payments and expenses, which included Change Program costs.
- Free cash flow increased due to higher cash flows
from operations and a dividend of $51
million paid by LSEG in the second quarter.
Highlights by Customer Segment - Three
Months Ended June 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
Three Months
Ended |
|
|
|
|
|
|
June 30, |
|
Change |
|
|
2021 |
2020 |
|
Total |
Constant
Currency |
Organic(1) |
Revenues |
|
|
|
|
|
|
|
Legal Professionals |
|
$673 |
$620 |
|
9% |
7% |
6% |
Corporates |
|
348 |
329 |
|
6% |
4% |
4% |
Tax & Accounting
Professionals |
|
197 |
168 |
|
17% |
15% |
15% |
"Big 3" Segments Combined |
|
1,218 |
1,117 |
|
9% |
7% |
7% |
Reuters News |
|
168 |
155 |
|
9% |
6% |
6% |
Global Print |
|
147 |
134 |
|
9% |
6% |
6% |
Eliminations/Rounding |
|
(1) |
(1) |
|
|
|
|
Revenues |
|
$1,532 |
$1,405 |
|
9% |
7% |
7% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Legal Professionals |
|
$285 |
$254 |
|
12% |
10% |
|
Corporates |
|
130 |
118 |
|
10% |
9% |
|
Tax & Accounting
Professionals |
|
72 |
54 |
|
32% |
32% |
|
"Big 3" Segments Combined |
|
487 |
426 |
|
14% |
13% |
|
Reuters News |
|
35 |
25 |
|
45% |
66% |
|
Global Print |
|
56 |
54 |
|
2% |
-1% |
|
Corporate costs |
|
(76) |
(26) |
|
n/a |
n/a |
|
Adjusted EBITDA |
|
$502 |
$479 |
|
5% |
5% |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin |
|
|
|
|
|
|
|
Legal Professionals |
|
42.3% |
40.9% |
|
140bp |
140bp |
|
Corporates |
|
37.2% |
35.9% |
|
130bp |
160bp |
|
Tax & Accounting
Professionals |
|
36.2% |
31.9% |
|
430bp |
450bp |
|
"Big 3" Segments Combined |
|
39.9% |
38.1% |
|
180bp |
190bp |
|
Reuters News |
|
20.8% |
15.6% |
|
520bp |
820bp |
|
Global Print |
|
37.9% |
40.5% |
|
-260bp |
-280bp |
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
|
Adjusted EBITDA margin |
|
32.7% |
34.1% |
|
-140bp |
-70bp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/a: not
applicable
(1) Computed for revenue growth only. |
|
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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 7% (6% organic) to $673 million.
- Recurring revenues grew 6% (93% of total, all organic),
primarily due to strong performances from Practical Law, Westlaw
Edge and the Government business as well as strong contributions
from FindLaw, and the company's Canada, Europe and Asia businesses, each of which grew mid to
upper single digits in the quarter.
- Transactions revenues grew 14% (7% of total, all organic),
primarily due to the Government business.
Adjusted EBITDA increased 12% to $285 million.
- The margin increased to 42.3% from 40.9%, primarily due to
higher revenues.
Corporates
Revenues increased 4% (all organic) to $348 million, primarily due to strong recurring
revenue growth, including strong growth from legal solutions and
the company's Latin America and
Asia businesses.
- Recurring revenues grew 5% (86% of total, all organic).
- Transactions revenues grew 1% (14% of total, all organic),
primarily related to increasing demand for solutions provided by
the Indirect Tax business.
Adjusted EBITDA increased 10% to $130 million.
- The margin increased to 37.2% from 35.9%, primarily due to
higher revenues.
Tax & Accounting Professionals
Revenues increased 15% (all organic) to $197 million, reflecting transactions revenue
growth of 43% related to the 2021 extension of the U.S. federal tax
filing deadline. Additionally, revenue growth benefited from a
similar shift in 2020 when transactions revenues moved from the
second quarter to the third quarter after the U.S. federal tax
filing deadline was extended from April to July. Normalizing for
the shift in the U.S. federal tax filing deadline, organic revenues
grew 10%.
- Recurring revenues grew 9% (76% of total, all organic),
including strong growth from the company's Latin American
businesses.
- Transactions revenues grew 43% (24% of total, all organic),
primarily due to shifts in timing of Pay-Per-Return tax filings and
audit products.
Adjusted EBITDA increased 32% to $72 million.
- The margin increased to 36.2% from 31.9%, primarily due to
higher revenues.
- 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 $168
million increased 6%, all organic, primarily due to the
segment's professional business, which had strong growth from
Reuters Events, whose performance was negatively impacted by
COVID-19 in 2020.
- Reuters Events continues to hold all events virtually and
continues to assess when in-person events can resume based on local
health guidelines and feedback from customers.
Adjusted EBITDA increased 45% to $35 million, primarily due to revenue growth.
Global Print
Revenues increased 6% to $147 million, driven by higher third-party
revenues for printing services and an increase in shipments,
reflecting a gradual return to office by large and mid-sized law
firms. The quarter's performance also reflected a favorable
comparison to the second quarter of 2020 when shipments were
delayed at the beginning of the COVID-19 pandemic.
- Global Print's third-quarter revenues are forecast to decline
between 5% and 8%.
- Global Print's full-year 2021 revenues are forecast to decline
between 4% and 7%.
Adjusted EBITDA increased 2% to $56 million.
- The margin decreased to 37.9% from 40.5% due to higher
costs.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
$76 million, which included
$41 million of Change Program costs,
compared to $26 million of Corporate
costs in the prior-year period. Additional information regarding
the Change Program is provided below.
Consolidated Financial Highlights -
Six Months Ended June 30
Six Months Ended
June 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 |
$3,112 |
$2,925 |
6% |
|
Operating profit |
$703 |
$655 |
7% |
|
Diluted earnings per share (EPS) |
$12.28 |
$0.64 |
n/m |
|
Cash flow from operations |
$842 |
$598 |
41% |
|
Non-IFRS Financial
Measures(1) |
|
|
|
|
Revenues |
$3,112 |
$2,925 |
6% |
5% |
Adjusted EBITDA |
$1,060 |
$959 |
11% |
10% |
Adjusted EBITDA margin |
34.1% |
32.8% |
130bp |
160bp |
Adjusted EPS |
$1.06 |
$0.92 |
15% |
15% |
Free cash flow |
$618 |
$340 |
82% |
|
(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% due to growth in recurring revenues
and a 1% favorable impact from foreign currency.
- Organic revenues increased 5%, driven by 4% growth in recurring
revenues, which comprised 79% of total revenues, and higher
transactions revenues.
- The company's "Big 3" segments, which collectively comprised
80% of total revenues, reported organic revenue growth of 6%.
Operating profit increased 7% as higher revenues more
than offset higher costs, which included Change Program costs.
- Adjusted EBITDA increased 11% reflecting the same
factors that impacted operating profit. The related margin
increased to 34.1% from 32.8% in the prior-year period. Adjusted
EBITDA margin was negatively impacted by 160bp due to Change
Program costs.
Diluted EPS increased to $12.28 per share from $0.64 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 $1.06 per share from $0.92 per share in the prior-year period,
primarily due to higher adjusted EBITDA.
Cash flow from operations 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 due to higher cash flows
from operations and the dividend paid by LSEG previously
noted.
Highlights by Customer Segment - Six
Months Ended June 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
Six Months
Ended |
|
|
|
|
|
|
June 30,
|
|
Change |
|
|
2021 |
2020 |
|
Total |
Constant
Currency |
Organic(1) |
Revenues |
|
|
|
|
|
|
|
Legal Professionals |
|
$1,341 |
$1,246 |
|
8% |
6% |
6% |
Corporates |
|
732 |
696 |
|
5% |
4% |
4% |
Tax & Accounting
Professionals |
|
422 |
386 |
|
9% |
9% |
9% |
"Big 3" Segments Combined |
|
2,495 |
2,328 |
|
7% |
6% |
6% |
Reuters News |
|
328 |
310 |
|
6% |
4% |
4% |
Global Print |
|
290 |
289 |
|
0% |
-2% |
-2% |
Eliminations/Rounding |
|
(1) |
(2) |
|
|
|
|
Revenues |
|
$3,112 |
$2,925 |
|
6% |
5% |
5% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Legal Professionals |
|
$564 |
$484 |
|
17% |
14% |
|
Corporates |
|
276 |
235 |
|
17% |
17% |
|
Tax & Accounting
Professionals |
|
170 |
138 |
|
23% |
23% |
|
"Big 3" Segments Combined |
|
1,010 |
857 |
|
18% |
16% |
|
Reuters News |
|
63 |
44 |
|
45% |
65% |
|
Global Print |
|
113 |
117 |
|
-4% |
-6% |
|
Corporate costs |
|
(126) |
(59) |
|
n/a |
n/a |
|
Adjusted EBITDA |
|
$1,060 |
$959 |
|
11% |
10% |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin |
|
|
|
|
|
|
|
Legal Professionals |
|
42.1% |
38.8% |
|
330bp |
300bp |
|
Corporates |
|
37.7% |
33.8% |
|
390bp |
410bp |
|
Tax & Accounting
Professionals |
|
40.2% |
35.7% |
|
450bp |
440bp |
|
"Big 3" Segments Combined |
|
40.5% |
36.8% |
|
370bp |
350bp |
|
Reuters News |
|
19.2% |
14.1% |
|
510bp |
780bp |
|
Global Print |
|
38.9% |
40.5% |
|
-160bp |
-190bp |
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
|
Adjusted EBITDA margin |
|
34.1% |
32.8% |
|
130bp |
160bp |
|
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|
|
|
|
|
|
|
n/a: not
applicable
(1) Computed for revenue growth only. |
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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 outlook for 2021, 2022 and 2023 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 second-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 provided an outlook for the third quarter of
2021 and updated its full-year outlook for 2021, which are
reflected in the table below. The company also reaffirmed its
outlook for 2022 and 2023.
Third-Quarter 2021
Outlook
- Total company revenues and total organic revenues are expected
to increase between 3.5% and 4.0%.
- "Big 3" total revenue growth and organic revenue growth are
forecast to range between 5.0% and 5.5%.
- Tax & Accounting Professionals revenue growth is forecast
to increase low single digits.
- Reuters News revenues are expected to increase between 2.0% and
3.0%.
- Global Print revenues are expected to decline between 5.0% and
8.0%.
Third-Quarter 2021
Outlook and update to Full-Year 2021 Outlook
Total Thomson Reuters |
Q3 2021
Outlook |
Original
FY 2021
Outlook
(February 23, 2021) |
FY 2021
Outlook
Update
(May 4, 2021) |
FY 2021
Outlook
Update
(August 5, 2021) |
Total Revenue Growth |
3.5% - 4.0% |
3.0% - 4.0% |
3.5% - 4.0% |
4.0% - 4.5% |
Organic Revenue Growth |
3.5% - 4.0% |
3.0% - 4.0% |
3.5% - 4.0% |
4.0% - 4.5% |
Adjusted EBITDA Margin |
- |
30% - 31% |
Unchanged |
31% - 32% |
Corporate Costs
Core Corporate Costs
Change Program Operating Expenses |
- |
$305 - $340 million
$130 - $140 million
$175 - $200 million |
Unchanged |
Unchanged |
Free Cash Flow |
- |
$1.0 - $1.1 billion |
Unchanged |
$1.1 - $1.2 billion |
Capital Expenditures - % of
Revenue
Change Program Capital Expenditures |
- |
9.0% - 9.5%
$125 - $150 million |
Unchanged |
Unchanged |
Depreciation & Amortization
of
Computer Software |
- |
$650 - $675 million |
Unchanged |
Unchanged |
Interest Expense (P&L) |
- |
$190 - $210 million |
Unchanged |
Unchanged |
Effective Tax Rate on Adjusted Earnings |
- |
16% - 18% |
Unchanged |
Unchanged |
Big 3 Segments
(Legal Professionals, Corporates and Tax & Accounting
Professionals) |
Q3 2021
Outlook |
Original
FY 2021
Outlook
(February 23, 2021) |
FY 2021
Outlook
Update
(May 4, 2021) |
FY 2021
Outlook
Update
(August 5, 2021) |
Total Revenue Growth |
5.0% - 5.5% |
4.5% - 5.5% |
5.0% - 5.5% |
5.5% - 6.0% |
Organic Revenue Growth |
5.0% - 5.5% |
4.5% - 5.5% |
5.0% - 5.5% |
5.5% - 6.0% |
Adjusted EBITDA Margin |
- |
38% - 39% |
Unchanged |
~ 39% |
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 - New $1.2 Billion Buyback Program and Amended Normal
Course Issuer Bid
Thomson Reuters also announced today that it plans to buy back
up to $1.2 billion of its common
shares. The new buyback program is in addition to the $200 million repurchase program that was
completed earlier this year.
Shares will be repurchased for the new buyback program under an
amended normal course issuer bid (NCIB). The amended NCIB, which is
subject to acceptance by the Toronto Stock Exchange (TSX), is
expected to become effective on or about August 10, 2021. The amended NCIB will increase
the maximum number of common shares that may be repurchased by an
additional 15 million. Under the amended NCIB, up to 20 million
common shares (representing approximately 4% of the company's
497,117,528 issued and outstanding shares as of December 24, 2020) may be repurchased between
January 4, 2021 and January 3, 2022. The NCIB, as originally approved
in December 2020, contemplated the
repurchase of up to 5 million common shares. Under the current
NCIB, Thomson Reuters repurchased 2,455,807 common shares in the
first quarter of 2021 for a total cost of approximately
$200 million, representing an average
price of $81.45 per share.
Under the amended NCIB, shares may be repurchased in open market
transactions on the TSX, the NYSE and/or other exchanges and
alternative trading systems, if eligible, or by such other means as
may be permitted by the TSX and/or NYSE or under applicable law,
including private agreement purchases if Thomson Reuters receives
an issuer bid exemption order in the future from applicable
securities regulatory authorities in Canada for such purchases. The price that
Thomson Reuters will pay for common shares in open market
transactions will be the market price at the time of purchase or
such other price as may be permitted by the TSX. Any private
agreement purchases made under an exemption order may be at a
discount to the prevailing market price. In accordance with TSX
rules, any daily repurchases (other than pursuant to a block
purchase exception) on the TSX under the amended NCIB are limited
to a maximum of 127,341 shares, which represents 25% of the average
daily trading volume on the TSX of 509,367 for the six months ended
November 30, 2020 (net of repurchases
made by the company during that time period). Any shares that are
repurchased are cancelled.
From time to time when Thomson Reuters does not possess material
non-public information about itself or its securities, it may enter
into a pre-defined plan with its broker to allow for the repurchase
of shares at times when the company ordinarily would not be active
in the market due to its own internal trading blackout periods,
insider trading rules or otherwise. Any such plans entered into
with the company's broker will be adopted in accordance with
applicable Canadian securities laws and the requirements of Rule
10b5-1 under the U.S. Securities Exchange Act of 1934, as
amended.
Decisions regarding any future repurchases will depend on
factors, such as market conditions, share price and other
opportunities to invest capital for growth. Thomson Reuters may
elect to suspend or discontinue share repurchases at any time, in
accordance with applicable laws.
Dividends
In February 2021, the company
announced its Board of Directors approved 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 September 15, 2021 to common shareholders of
record as of August 19, 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 and former Refinitiv
senior management.
As of August 4, 2021, Thomson
Reuters indirectly owned approximately 72.4 million LSEG shares
which had a market value of approximately $7.5 billion based on LSEG's closing share price
on that day. Based on Thomson Reuters' ownership interest in LSEG,
it expects to receive dividends of approximately $75 million in 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 six-month period ended
June 30, 2021, the company paid
$444 million of taxes related to
these transactions.
Social Impact/ESG
In the second quarter of 2021, Thomson Reuters issued its 2020
Social Impact Report, which focuses on the company's Environmental,
Social and Governance (ESG) efforts. A copy of the report is
available on the company's Social Impact website.
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
21-22 of the company's first-quarter management's discussion and
analysis (MD&A) for the period ended March 31, 2021. Material assumptions and material
risks related to the company's outlook will also be included in the
company's second-quarter MD&A for the period ended June 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
second-quarter 2021 results and its business outlook today
beginning at 9:00 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 |
4.0% - 4.5% |
4.0% - 5.0% |
5.0% - 6.0% |
Organic Revenue Growth |
4.0% - 4.5% |
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 - $340 million
$130 - $140 million
$175 - $200 million |
$245 - $280 million
$120 - $130 million
$125 - $150 million |
$110 - $120 million
$110 - $120 million
$0 |
Free Cash Flow |
$1.1 - $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%
$125 - $150 million |
7.5% - 8.0%
$75 - $100 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 |
16% - 18% |
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 |
5.5% - 6.0% |
5.5% - 6.5% |
6.0% - 7.0% |
Organic Revenue Growth |
5.5% - 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 |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
|
2021 |
2020 |
|
2021 |
2020 |
|
CONTINUING OPERATIONS |
|
|
|
|
|
|
Revenues |
$1,532 |
$1,405 |
|
$3,112 |
$2,925 |
|
Operating expenses |
(1,036) |
(929) |
|
(2,054) |
(1,946) |
|
Depreciation |
(42) |
(43) |
|
(88) |
(83) |
|
Amortization of computer software |
(122) |
(118) |
|
(237) |
(229) |
|
Amortization of other identifiable intangible
assets |
(30) |
(30) |
|
(61) |
(60) |
|
Other operating gains, net |
14 |
80 |
|
31 |
48 |
|
Operating profit |
316 |
365 |
|
703 |
655 |
|
Finance costs, net: |
|
|
|
|
|
|
Net interest expense |
(49) |
(52) |
|
(100) |
(97) |
|
Other finance income
(costs) |
2 |
(13) |
|
(4) |
34 |
|
Income before tax and equity method
investments |
269 |
300 |
|
599 |
592 |
|
Share of post-tax earnings (losses) in equity
method investments |
1,092 |
(153) |
|
7,389 |
(207) |
|
Tax expense |
(289) |
(16) |
|
(1,883) |
(63) |
|
Earnings from continuing operations |
1,072 |
131 |
|
6,105 |
322 |
|
Loss from discontinued operations, net of tax |
(4) |
(5) |
|
(1) |
(3) |
|
Net earnings |
$1,068 |
$126 |
|
$6,104 |
$319 |
|
Earnings attributable to common shareholders |
$1,068 |
$126 |
|
$6,104 |
$319 |
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
|
From continuing operations |
$2.16 |
$0.26 |
|
$12.31 |
$0.65 |
|
From discontinued operations |
(0.01) |
(0.01) |
|
(0.01) |
(0.01) |
|
Basic earnings per share |
$2.15 |
$0.25 |
|
$12.30 |
$0.64 |
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
From continuing operations |
$2.16 |
$0.26 |
|
$12.28 |
$0.65 |
|
From discontinued operations |
(0.01) |
(0.01) |
|
- |
(0.01) |
|
Diluted earnings per share |
$2.15 |
$0.25 |
|
$12.28 |
$0.64 |
|
|
|
|
|
|
|
|
Basic weighted-average common shares |
496,098,238 |
496,317,115 |
|
496,016,467 |
496,261,070 |
|
Diluted weighted-average common shares |
497,259,072 |
497,580,339 |
|
497,109,791 |
497,579,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomson Reuters
Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited) |
|
|
June 30, |
|
December 31, |
2021 |
|
2020 |
Assets |
|
|
|
Cash and cash equivalents |
$2,342 |
|
$1,787 |
Trade and other receivables |
1,041 |
|
1,151 |
Other financial assets |
77 |
|
612 |
Prepaid expenses and other current assets |
425 |
|
425 |
Current assets |
3,885 |
|
3,975 |
|
|
|
|
Property and equipment, net |
482 |
|
545 |
Computer software, net |
819 |
|
830 |
Other identifiable intangible assets, net |
3,368 |
|
3,427 |
Goodwill |
5,992 |
|
5,976 |
Equity method investments |
7,913 |
|
1,136 |
Other non-current assets |
929 |
|
788 |
Deferred tax |
1,173 |
|
1,204 |
Total assets |
$24,561 |
|
$17,881 |
|
|
|
|
Liabilities and equity |
|
|
|
Liabilities |
|
|
|
Payables, accruals and provisions |
$1,023 |
|
$1,159 |
Current tax liabilities |
663 |
|
251 |
Deferred revenue |
923 |
|
866 |
Other financial liabilities |
158 |
|
376 |
Current liabilities |
2,767 |
|
2,652 |
|
|
|
|
Long-term indebtedness |
3,806 |
|
3,772 |
Provisions and other non-current liabilities |
927 |
|
1,083 |
Deferred tax |
1,284 |
|
394 |
Total liabilities |
8,784 |
|
7,901 |
|
|
|
|
Equity |
|
|
|
Capital |
5,502 |
|
5,458 |
Retained earnings |
11,010 |
|
5,211 |
Accumulated other comprehensive loss |
(735) |
|
(689) |
Total equity |
15,777 |
|
9,980 |
Total liabilities and equity |
$24,561 |
|
$17,881 |
Thomson Reuters
Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited) |
|
|
Three Months
Ended
June 30, |
|
Six Months
Ended
June 30, |
|
2021 |
2020 |
|
2021 |
2020 |
Cash provided by (used in): |
|
|
|
|
|
Operating activities |
|
|
|
|
|
Earnings from continuing operations |
$1,072 |
$131 |
|
$6,105 |
$322 |
Adjustments for: |
|
|
|
|
|
Depreciation |
42 |
43 |
|
88 |
83 |
Amortization of computer software |
122 |
118 |
|
237 |
229 |
Amortization of other identifiable intangible
assets |
30 |
30 |
|
61 |
60 |
Share of post-tax (earnings) losses in equity
method investments |
(1,092) |
153 |
|
(7,389) |
207 |
Deferred tax |
249 |
(34) |
|
923 |
(37) |
Other |
33 |
(17) |
|
63 |
(6) |
Changes in working capital and other
items |
15 |
(7) |
|
800 |
(250) |
Operating cash flows from continuing
operations |
471 |
417 |
|
888 |
608 |
Operating cash flows from discontinued
operations |
(9) |
5 |
|
(46) |
(10) |
Net cash provided by operating activities |
462 |
422 |
|
842 |
598 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Acquisitions, net of cash acquired |
- |
2 |
|
(3) |
(122) |
Proceeds from disposals of businesses and
investments |
10 |
4 |
|
15 |
1 |
Dividend from sale of LSEG shares |
- |
- |
|
994 |
- |
Capital expenditures |
(113) |
(145) |
|
(233) |
(287) |
Proceeds from disposals of property and
equipment |
- |
45 |
|
- |
64 |
Other investing activities |
52 |
1 |
|
53 |
2 |
Taxes paid on sale of Refinitiv and LSEG
shares |
(438) |
- |
|
(444) |
- |
Investing cash flows from continuing
operations |
(489) |
(93) |
|
382 |
(342) |
Investing cash flows from discontinued
operations |
- |
- |
|
(42) |
- |
Net cash (used in) provided by investing
activities |
(489) |
(93) |
|
340 |
(342) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from debt |
- |
999 |
|
- |
2,019 |
Repayments of debt |
- |
(1,000) |
|
- |
(1,645) |
Net borrowings under short-term loan
facilities |
- |
- |
|
- |
118 |
Payments of lease principal |
(22) |
(18) |
|
(43) |
(36) |
Repurchases of common shares |
- |
- |
|
(200) |
(200) |
Dividends paid on preference shares |
- |
- |
|
(1) |
(1) |
Dividends paid on common shares |
(194) |
(182) |
|
(388) |
(364) |
Other financing activities |
- |
(4) |
|
5 |
(16) |
Net cash used in financing activities |
(216) |
(205) |
|
(627) |
(125) |
(Decrease) increase in cash and bank
overdrafts |
(243) |
124 |
|
555 |
131 |
Translation adjustments |
1 |
- |
|
- |
(10) |
Cash and bank overdrafts at beginning of
period |
2,584 |
822 |
|
1,787 |
825 |
Cash and bank overdrafts at end of period |
$2,342 |
$946 |
|
$2,342 |
$946 |
Cash and bank overdrafts at end of period
comprised of: |
|
|
|
|
|
Cash and cash equivalents |
$2,342 |
$946 |
|
$2,342 |
$946 |
Thomson Reuters
Corporation |
Reconciliation of
Earnings from Continuing Operations to Adjusted
EBITDA(1) |
(millions of U.S.
dollars, except for margins) |
(unaudited) |
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
|
2021 |
2020 |
|
2021 |
2020 |
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations |
$1,072 |
$131 |
|
$6,105 |
$322 |
|
|
Adjustments to remove: |
|
|
|
|
|
|
|
Tax expense |
289 |
16 |
|
1,883 |
63 |
|
|
Other finance (income) costs |
(2) |
13 |
|
4 |
(34) |
|
|
Net interest expense |
49 |
52 |
|
100 |
97 |
|
|
Amortization of other identifiable intangible
assets |
30 |
30 |
|
61 |
60 |
|
|
Amortization of computer software |
122 |
118 |
|
237 |
229 |
|
|
Depreciation |
42 |
43 |
|
88 |
83 |
|
|
EBITDA |
$1,602 |
$403 |
|
$8,478 |
$820 |
|
|
Adjustments to remove: |
|
|
|
|
|
|
|
Share of post-tax (earnings) losses in equity
method investments |
(1,092) |
153 |
|
(7,389) |
207 |
|
|
Other operating gains, net |
(14) |
(80) |
|
(31) |
(48) |
|
|
Fair value adjustments(4) |
6 |
3 |
|
2 |
(20) |
|
|
Adjusted EBITDA |
$502 |
$479 |
|
$1,060 |
$959 |
|
|
Adjusted EBITDA margin(1) |
32.7% |
34.1% |
|
34.1% |
32.8% |
|
|
|
|
|
|
|
|
Thomson Reuters
Corporation |
Reconciliation of
Net 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
June 30, |
|
Six
Months Ended
June 30, |
|
|
|
2021 |
2020 |
Change |
|
2021 |
2020 |
Change |
Net earnings |
$1,068 |
$126 |
|
|
$6,104 |
$319 |
|
Adjustments to remove: |
|
|
|
|
|
|
|
Fair value adjustments (4) |
6 |
3 |
|
|
2 |
(20) |
|
Amortization of other identifiable intangible
assets |
30 |
30 |
|
|
61 |
60 |
|
Other operating gains, net |
(14) |
(80) |
|
|
(31) |
(48) |
|
Other finance (income) costs |
(2) |
13 |
|
|
4 |
(34) |
|
Share of post-tax (earnings) losses
in equity method
investments |
(1,092) |
153 |
|
|
(7,389) |
207 |
|
Tax on above items |
255 |
(28) |
|
|
1,790 |
(59) |
|
Tax items impacting comparability |
(12) |
9 |
|
|
(11) |
39 |
|
Loss from discontinued operations, net of tax |
4 |
5 |
|
|
1 |
3 |
|
Interim period effective tax rate
normalization(3) |
(3) |
(10) |
|
|
(2) |
(6) |
|
Dividends declared on preference shares |
- |
- |
|
|
(1) |
(1) |
|
Adjusted earnings (2) |
$240 |
$221 |
|
|
$528 |
$460 |
|
Adjusted EPS (2) |
$0.48 |
$0.44 |
9% |
|
$1.06 |
$0.92 |
15% |
Foreign currency(5) |
|
|
0% |
|
|
|
0% |
Constant currency(5) |
|
|
9% |
|
|
|
15% |
|
|
|
|
|
|
|
|
Diluted weighted-average common shares
(millions) |
497.3 |
497.6 |
|
|
497.1 |
497.6 |
|
Refer to page 24 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 |
|
Six Months
Ended |
June 30, |
|
June 30, |
|
2021 |
2020 |
|
2021 |
2020 |
Net cash provided by operating
activities |
$462 |
$422 |
|
$842 |
$598 |
Capital expenditures |
(113) |
(145) |
|
(233) |
(287) |
Proceeds from disposals of property and
equipment |
- |
45 |
|
- |
64 |
Other investing activities |
52 |
1 |
|
53 |
2 |
Payments of lease principal |
(22) |
(18) |
|
(43) |
(36) |
Dividends paid on preference shares |
- |
- |
|
(1) |
(1) |
Free cash flow |
$379 |
$305 |
|
$618 |
$340 |
|
|
|
|
|
|
|
Thomson Reuters
Corporation |
Reconciliation of
Net Debt and Leverage Ratio of Net Debt to Adjusted
EBITDA(8) |
(millions of U.S.
dollars) |
(unaudited) |
|
|
|
June 30,
2021 |
Long-term indebtedness |
|
$3,806 |
Total debt |
|
3,806 |
Swaps |
|
(125) |
Total debt after swaps |
|
3,681 |
Remove fair value adjustments for hedges |
|
(7) |
Total debt after currency arrangements |
|
3,674 |
Remove transaction costs, premiums or discounts
included in the carrying value of debt |
|
36 |
Add: lease liabilities (current and
non-current) |
|
271 |
Less: cash and cash equivalents |
|
(2,342) |
Net debt (8) |
|
$1,639 |
|
|
|
Adjusted EBITDA(1)* |
|
$2,076 |
Net Debt / Adjusted
EBITDA(8)* |
|
0.8:1 |
* 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 twelve-month basis and includes adjusted
EBITDA of $502 million, $558 million, $525
million and $491 million for
the three months ended June 30, 2021,
March 31, 2021, December 31, 2020 and September 30, 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
March 31, 2021 and September 30, 2020, for additional information
regarding the calculation of adjusted EBITDA in each of these
periods.
Refer to page 24 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 |
|
|
|
|
June 30, |
|
Change |
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
SUBTOTAL
Constant
Currency(5) |
Acquisitions/
(Divestitures) |
Organic(7) |
|
Total Revenues |
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$673 |
$620 |
|
9% |
2% |
7% |
0% |
6% |
|
Corporates |
|
348 |
329 |
|
6% |
1% |
4% |
0% |
4% |
|
Tax & Accounting Professionals |
|
197 |
168 |
|
17% |
1% |
15% |
0% |
15% |
|
"Big 3" Segments Combined |
|
1,218 |
1,117 |
|
9% |
2% |
7% |
0% |
7% |
|
Reuters News |
|
168 |
155 |
|
9% |
2% |
6% |
0% |
6% |
|
Global Print |
|
147 |
134 |
|
9% |
3% |
6% |
0% |
6% |
|
Eliminations/Rounding |
|
(1) |
(1) |
|
|
|
|
|
|
|
Revenues |
|
$1,532 |
$1,405 |
|
9% |
2% |
7% |
0% |
7% |
|
|
|
|
|
|
|
|
|
|
|
|
Recurring Revenues |
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$626 |
$580 |
|
8% |
2% |
6% |
0% |
6% |
|
Corporates |
|
300 |
282 |
|
6% |
2% |
5% |
0% |
5% |
|
Tax & Accounting Professionals |
|
150 |
136 |
|
10% |
1% |
9% |
0% |
9% |
|
"Big 3" Segments Combined |
|
1,076 |
998 |
|
8% |
2% |
6% |
0% |
6% |
|
Reuters News |
|
144 |
141 |
|
3% |
2% |
1% |
0% |
1% |
|
Total Recurring Revenues |
|
$1,220 |
$1,139 |
|
7% |
2% |
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions Revenues |
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$47 |
$40 |
|
18% |
4% |
14% |
0% |
14% |
|
Corporates |
|
48 |
47 |
|
2% |
1% |
1% |
0% |
1% |
|
Tax & Accounting Professionals |
|
47 |
32 |
|
45% |
2% |
43% |
0% |
43% |
|
"Big 3" Segments Combined |
|
142 |
119 |
|
19% |
2% |
17% |
0% |
17% |
|
Reuters News |
|
24 |
14 |
|
72% |
9% |
62% |
2% |
61% |
|
Total Transactions Revenues |
|
$166 |
$133 |
|
25% |
3% |
22% |
0% |
22% |
|
|
|
|
|
|
|
|
|
|
|
|
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 24 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) |
|
|
|
Six Months
Ended |
|
|
|
|
June 30, |
|
Change |
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
SUBTOTAL
Constant
Currency(5) |
Acquisitions/(Divestitures) |
Organic(7) |
|
Total Revenues |
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$1,341 |
$1,246 |
|
8% |
2% |
6% |
0% |
6% |
|
Corporates |
|
732 |
696 |
|
5% |
1% |
4% |
0% |
4% |
|
Tax & Accounting Professionals |
|
422 |
386 |
|
9% |
0% |
9% |
0% |
9% |
|
"Big 3" Segments Combined |
|
2,495 |
2,328 |
|
7% |
1% |
6% |
0% |
6% |
|
Reuters News |
|
328 |
310 |
|
6% |
2% |
4% |
0% |
4% |
|
Global Print |
|
290 |
289 |
|
0% |
2% |
-2% |
0% |
-2% |
|
Eliminations/Rounding |
|
(1) |
(2) |
|
|
|
|
|
|
|
Revenues |
|
$3,112 |
$2,925 |
|
6% |
1% |
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
Recurring Revenues |
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$1,247 |
$1,167 |
|
7% |
2% |
5% |
0% |
5% |
|
Corporates |
|
595 |
563 |
|
6% |
1% |
5% |
0% |
5% |
|
Tax & Accounting Professionals |
|
310 |
294 |
|
6% |
-1% |
6% |
0% |
6% |
|
"Big 3" Segments Combined |
|
2,152 |
2,024 |
|
6% |
1% |
5% |
0% |
5% |
|
Reuters News |
|
288 |
283 |
|
2% |
2% |
0% |
0% |
0% |
|
Total Recurring Revenues |
|
$2,440 |
$2,307 |
|
6% |
1% |
5% |
0% |
4% |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions Revenues |
|
|
|
|
|
|
|
|
|
|
Legal Professionals |
|
$94 |
$79 |
|
19% |
3% |
16% |
0% |
16% |
|
Corporates |
|
137 |
133 |
|
3% |
0% |
3% |
0% |
3% |
|
Tax & Accounting Professionals |
|
112 |
92 |
|
20% |
1% |
19% |
0% |
19% |
|
"Big 3" Segments Combined |
|
343 |
304 |
|
13% |
1% |
11% |
0% |
11% |
|
Reuters News |
|
40 |
27 |
|
48% |
5% |
43% |
1% |
42% |
|
Total Transactions Revenues |
|
$383 |
$331 |
|
15% |
2% |
14% |
0% |
14% |
|
|
|
|
|
|
|
|
|
|
|
|
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 24 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 |
|
|
|
|
June 30, |
|
Change |
|
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
Constant
Currency(5) |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Legal Professionals |
|
$285 |
$254 |
|
12% |
2% |
10% |
|
Corporates |
|
130 |
118 |
|
10% |
1% |
9% |
|
Tax & Accounting Professionals |
|
72 |
54 |
|
32% |
1% |
32% |
|
"Big 3" Segments Combined |
|
487 |
426 |
|
14% |
2% |
13% |
|
Reuters News |
|
35 |
25 |
|
45% |
-21% |
66% |
|
Global Print |
|
56 |
54 |
|
2% |
3% |
-1% |
|
Corporate costs |
|
(76) |
(26) |
|
n/a |
n/a |
n/a |
|
Adjusted EBITDA |
|
$502 |
$479 |
|
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
Legal Professionals |
|
42.3% |
40.9% |
|
140bp |
0bp |
140bp |
|
Corporates |
|
37.2% |
35.9% |
|
130bp |
-30bp |
160bp |
|
Tax & Accounting Professionals |
|
36.2% |
31.9% |
|
430bp |
-20bp |
450bp |
|
"Big 3" Segments Combined |
|
39.9% |
38.1% |
|
180bp |
-10bp |
190bp |
|
Reuters News |
|
20.8% |
15.6% |
|
520bp |
-300bp |
820bp |
|
Global Print |
|
37.9% |
40.5% |
|
-260bp |
20bp |
-280bp |
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
|
Adjusted EBITDA margin |
|
32.7% |
34.1% |
|
-140bp |
-70bp |
-70bp |
|
|
|
|
|
|
|
|
|
|
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 24 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) |
|
|
|
|
Six Months
Ended |
|
|
|
|
June 30, |
|
Change |
|
|
2021 |
2020 |
|
Total |
Foreign
Currency |
Constant
Currency(5) |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Legal Professionals |
|
$564 |
$484 |
|
17% |
3% |
14% |
|
Corporates |
|
276 |
235 |
|
17% |
0% |
17% |
|
Tax & Accounting Professionals |
|
170 |
138 |
|
23% |
0% |
23% |
|
"Big 3" Segments Combined |
|
1,010 |
857 |
|
18% |
2% |
16% |
|
Reuters News |
|
63 |
44 |
|
45% |
-20% |
65% |
|
Global Print |
|
113 |
117 |
|
-4% |
3% |
-6% |
|
Corporate costs |
|
(126) |
(59) |
|
n/a |
n/a |
n/a |
|
Adjusted EBITDA |
|
$1,060 |
$959 |
|
11% |
1% |
10% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
Legal Professionals |
|
42.1% |
38.8% |
|
330bp |
30bp |
300bp |
|
Corporates |
|
37.7% |
33.8% |
|
390bp |
-20bp |
410bp |
|
Tax & Accounting Professionals |
|
40.2% |
35.7% |
|
450bp |
10bp |
440bp |
|
"Big 3" Segments Combined |
|
40.5% |
36.8% |
|
370bp |
20bp |
350bp |
|
Reuters News |
|
19.2% |
14.1% |
|
510bp |
-270bp |
780bp |
|
Global Print |
|
38.9% |
40.5% |
|
-160bp |
30bp |
-190bp |
|
Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
|
Adjusted EBITDA margin |
|
34.1% |
32.8% |
|
130bp |
-30bp |
160bp |
|
|
|
|
|
|
|
|
|
|
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 24 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. |
|
|
(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. |
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