TORONTO, Aug. 2, 2023
/PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today reported
results for the second quarter ended June
30, 2023:
- Solid revenue momentum continued in the second quarter
-
- Total company revenue up 2% / organic revenue up 5%
-
- Organic revenue up 7% for the "Big 3" segments (Legal
Professionals, Corporates and Tax & Accounting
Professionals)
- Based on Q2 performance, maintained full-year 2023 outlook for
organic revenue, adjusted EBITDA margin and free cash flow
-
- Interest expense, tax rate and accrued capital expenditures
outlooks updated
- Completed $2 billion return of
capital transaction; and reduced share count by 15.8 million shares
in concurrent consolidation
- Sold 15.5 million shares of the London Stock Exchange Group
(LSEG) in the second quarter, for gross proceeds of $1.6 billion
- Signed definitive agreement in June to acquire Casetext and
completed Reuters acquisition of Imagen in July
"I am pleased with our performance in the second quarter as we
continued to see good momentum across our portfolio despite an
uncertain macro backdrop," said Steve
Hasker, president and CEO of Thomson Reuters. "Importantly,
our confidence around the opportunity that generative AI brings to
us and our customers continues to strengthen. We made good
progress in executing our 'build, partner, buy' approach throughout
the quarter, with organic AI builds progressing, our announcement
of an intelligent drafting solution with Microsoft, and the
announcement of our intention to acquire Casetext. Our capital
capacity and liquidity will also remain a key asset as we look to
continue innovating in our markets, strengthening our leading
positions and generating shareholder value."
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)
|
2023
|
2022
|
Change
|
Change at
Constant
Currency
|
Revenues
|
$1,647
|
$1,614
|
2 %
|
|
Operating
profit
|
$825
|
$391
|
111 %
|
|
Diluted earnings (loss)
per share (EPS)
|
$1.90
|
$(0.24)
|
n/m
|
|
Net cash provided by
operating activities
|
$695
|
$433
|
59 %
|
|
Non-IFRS Financial
Measures(1)
|
|
|
|
|
Revenues
|
$1,647
|
$1,614
|
2 %
|
2 %
|
Adjusted
EBITDA
|
$662
|
$561
|
18 %
|
18 %
|
Adjusted EBITDA
margin
|
40.1 %
|
34.7 %
|
540bp
|
530bp
|
Adjusted EPS
|
$0.84
|
$0.60
|
40 %
|
40 %
|
Free cash
flow
|
$596
|
$342
|
74 %
|
|
(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. See the "Non-IFRS Financial
Measures"
section and the tables appended to this news release for additional
information on these and other non-IFRS financial measures,
including
how they are defined and reconciled to the most directly comparable
IFRS measures.
n/m: not
meaningful
|
Revenues increased 2%, driven by growth across four of
the company's five business segments. Net divestitures had a 3%
negative impact on revenues and foreign currency had no impact.
- Organic revenues increased 5%, driven by 6% growth in recurring
revenues (80% of total revenues) as well as 6% growth in
transactions revenues. Global Print revenues decreased 4%
organically.
- The company's "Big 3" segments reported organic revenue growth
of 7% and collectively comprised 81% of total revenues.
Operating profit increased 111% primarily due to the gain
on the sale of a majority stake in the company's Elite business.
Higher revenues and lower costs also contributed to operating
profit growth.
- Adjusted EBITDA, which excludes the gain on sale of
Elite, as well as other adjustments, increased 18% due to higher
revenues and lower costs. The related margin increased to 40.1%
from 34.7% in the prior-year period. Lower costs reflected Change
Program investments made in the prior-year period, which benefited
the year-over-year change in adjusted EBITDA margin by 190bp, as
well as the timing of expenses. Foreign currency contributed 10bp
to the change.
Diluted EPS was $1.90
compared to a diluted loss per share of $0.24 in the prior-year period. The increase
reflected higher operating profit and an increase in the value of
the company's investment in LSEG, while the prior-year period
included a significant reduction in the value of the company's
investment in LSEG.
- Adjusted EPS, which excludes the gain on the sale of a
majority stake in Elite, changes in value of the company's LSEG
investment, as well as other adjustments, increased to $0.84 per share from $0.60 per share in the prior-year period,
primarily due to higher adjusted EBITDA.
Net cash provided by operating activities increased
$262 million primarily due to the
cash benefits from higher revenues and lower costs, lower tax
payments, and favorable movements in working capital.
- Free cash flow increased $254
million primarily due to the same factors as net cash
provided by operating activities.
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
|
|
|
2023
|
2022
|
|
Total
|
Constant
Currency(1)
|
Organic(1)(2)
|
Revenues
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$705
|
$700
|
|
1 %
|
1 %
|
6 %
|
Corporates
|
|
392
|
373
|
|
5 %
|
5 %
|
7 %
|
Tax &
Accounting Professionals
|
|
229
|
217
|
|
5 %
|
7 %
|
10 %
|
"Big 3" Segments
Combined(1)
|
|
1,326
|
1,290
|
|
3 %
|
3 %
|
7 %
|
Reuters
News
|
|
194
|
188
|
|
3 %
|
2 %
|
1 %
|
Global
Print
|
|
133
|
142
|
|
-6 %
|
-5 %
|
-4 %
|
Eliminations/Rounding
|
|
(6)
|
(6)
|
|
|
|
|
Revenues
|
|
$1,647
|
$1,614
|
|
2 %
|
2 %
|
5 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$345
|
$304
|
|
14 %
|
14 %
|
|
Corporates
|
|
163
|
139
|
|
17 %
|
17 %
|
|
Tax &
Accounting Professionals
|
|
89
|
81
|
|
10 %
|
11 %
|
|
"Big 3" Segments
Combined(1)
|
|
597
|
524
|
|
14 %
|
14 %
|
|
Reuters
News
|
|
45
|
44
|
|
2 %
|
-7 %
|
|
Global
Print
|
|
53
|
50
|
|
5 %
|
5 %
|
|
Corporate
costs
|
|
(33)
|
(57)
|
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$662
|
$561
|
|
18 %
|
18 %
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin(1)
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
48.9 %
|
43.4 %
|
|
550bp
|
540bp
|
|
Corporates
|
|
41.6 %
|
37.4 %
|
|
420bp
|
430bp
|
|
Tax &
Accounting Professionals
|
|
38.5 %
|
37.4 %
|
|
110bp
|
110bp
|
|
"Big 3" Segments
Combined(1)
|
|
44.9 %
|
40.7 %
|
|
420bp
|
430bp
|
|
Reuters
News
|
|
23.1 %
|
23.3 %
|
|
-20bp
|
-210bp
|
|
Global
Print
|
|
39.7 %
|
35.4 %
|
|
430bp
|
390bp
|
|
Adjusted EBITDA
margin
|
|
40.1 %
|
34.7 %
|
|
540bp
|
530bp
|
|
|
|
|
|
|
|
|
|
(1) See the
"Non-IFRS Financial Measures" section and the tables appended to
this news release for additional information on these and
other non-IFRS financial measures. To compute segment and
consolidated adjusted EBITDA margin, the Company excludes fair
value
adjustments related to acquired deferred
revenues.
(2) Computed
for revenue growth only.
n/a: not
applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 1% to $705
million, reflecting a significant negative impact from net
divestitures. Organic revenues increased 6%.
- Recurring revenues grew 2% (95% of total, 5% organic). Organic
growth was primarily driven by Westlaw, Practical Law, HighQ, and
the segment's international businesses.
- Transactions revenues declined 12% (5% of total, 12% organic
growth). Organic growth was primarily due to the Government
business and revenue timing at Findlaw.
Adjusted EBITDA increased 14% to $345 million.
- The margin increased to 48.9% from 43.4%, driven by higher
revenues and the timing of expenses, with the latter expected to
normalize in the second half of the year.
Corporates
Revenues increased 5% to $392
million, including a negative impact from net divestitures.
Organic revenues increased 7%.
- Recurring revenues grew 5% (87% of total, 8% organic) primarily
driven by strong growth in Practical Law, CLEAR and our
Latin America business.
- Transactions revenues grew 2% (13% of total, decreased 1%
organic).
Adjusted EBITDA increased 17% to $163 million.
- The margin increased to 41.6% from 37.4%, driven by higher
revenues and the timing of expenses, with the latter expected to
normalize in the second half of the year.
Tax & Accounting Professionals
Revenues increased 7% to $229
million, including a negative impact from net divestitures.
Organic revenues increased 10%.
- Recurring revenues increased 1% (73% of total, 9% organic).
Organic growth was driven by the segment's Latin America business.
- Transactions revenues increased 27% (27% of total, 12% organic)
primarily due to Confirmation and SurePrep.
Adjusted EBITDA increased 10% to $89 million.
- The margin increased to 38.5% from 37.4%, driven by 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 $194 million
increased 2% (1% organic). The moderation in revenue growth was
driven by a lower contractual price increase in 2023 compared to
2022 of our news agreement with the Data & Analytics business
of LSEG, slower events growth and lower digital revenues.
Adjusted EBITDA increased 2% to $45 million, primarily due to currency
benefits.
Global Print
Revenues decreased 5% (decreased 4% organic) to
$133 million, which was in line with
our expectations.
Adjusted EBITDA increased 5% to $53
million.
- The margin increased to 39.7% from 35.4%, driven largely by
expense timing related to materials sourcing and labor. We expect
this to normalize in Q3.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
$33 million. Corporate costs were
$57 million in the prior-year period
and included $30 million of Change
Program costs.
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)
|
2023
|
2022
|
Change
|
Change at
Constant
Currency
|
Revenues
|
$3,385
|
$3,288
|
3 %
|
|
Operating
profit
|
$1,333
|
$805
|
66 %
|
|
Diluted EPS
|
$3.49
|
$1.83
|
91 %
|
|
Net cash provided by
operating activities
|
$962
|
$708
|
36 %
|
|
Non-IFRS Financial
Measures(1)
|
|
|
|
|
Revenues
|
$3,385
|
$3,288
|
3 %
|
4 %
|
Adjusted
EBITDA
|
$1,339
|
$1,161
|
15 %
|
15 %
|
Adjusted EBITDA
margin
|
39.4 %
|
35.3 %
|
410bp
|
380bp
|
Adjusted EPS
|
$1.67
|
$1.26
|
33 %
|
33 %
|
Free cash
flow
|
$729
|
$428
|
70 %
|
|
(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. See
the "Non-IFRS Financial Measures" section and the tables
appended
to this news release for additional information on these and other
non-IFRS financial measures, including how they are defined and
reconciled to the most directly comparable IFRS
measures.
|
Revenues increased 3%, driven by growth across four
of the company's five business segments. Net divestitures had a 2%
negative impact on revenues and foreign currency had 1% negative
impact.
- Organic revenues increased 6%, driven by 6% growth in recurring
revenues (78% of total revenues) as well as 9% growth in
transactions revenues. Global Print revenues decreased 2%
organically.
- The company's "Big 3" segments reported organic revenue growth
of 7% and collectively comprised 81% of total revenues.
Operating profit increased 66% primarily due to the gain
on the sale of a majority stake in the company's Elite business.
Higher revenues and lower costs also contributed to operating
profit growth.
- Adjusted EBITDA, which excludes the gain on sale of
Elite, as well as other adjustments, increased 15% due to higher
revenues and lower costs. The related margin increased to 39.4%
from 35.3% in the prior-year period. Lower costs reflected Change
Program investments made in the prior-year period, which benefited
the year-over-year change in adjusted EBITDA margin by 190bp, as
well as the timing of expenses. Foreign currency contributed 30bp
to the year-over-year change.
Diluted EPS was $3.49 per
share compared to $1.83 per share in
the prior-year period primarily due to higher operating profit and
an increase in the current period in the value of the company's
investment in LSEG.
- Adjusted EPS, which excludes the gain on the sale of a
majority stake in the company's Elite business, changes in value of
the company's LSEG investment, as well as other adjustments,
increased to $1.67 per share from
$1.26 per share in the prior-year
period, primarily due to higher adjusted EBITDA.
Net cash provided by operating activities increased
$254 million due to cash benefits
from higher revenues and lower costs, lower tax payments, and
favorable movements in working capital.
- Free cash flow increased $301
million due to higher cash flows from operating activities
as well as lower capital expenditures. The prior-year period
included investments in the Change Program.
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
|
|
|
2023
|
2022
|
|
Total
|
Constant
Currency(1)
|
Organic(1)(2)
|
Revenues
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$1,419
|
$1,398
|
|
2 %
|
2 %
|
6 %
|
Corporates
|
|
827
|
784
|
|
5 %
|
6 %
|
8 %
|
Tax &
Accounting Professionals
|
|
511
|
470
|
|
9 %
|
10 %
|
10 %
|
"Big 3" Segments
Combined(1)
|
|
2,757
|
2,652
|
|
4 %
|
5 %
|
7 %
|
Reuters
News
|
|
369
|
364
|
|
1 %
|
1 %
|
1 %
|
Global
Print
|
|
271
|
284
|
|
-5 %
|
-3 %
|
-2 %
|
Eliminations/Rounding
|
|
(12)
|
(12)
|
|
|
|
|
Revenues
|
|
$3,385
|
$3,288
|
|
3 %
|
4 %
|
6 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$663
|
$609
|
|
9 %
|
9 %
|
|
Corporates
|
|
317
|
296
|
|
7 %
|
7 %
|
|
Tax &
Accounting Professionals
|
|
238
|
203
|
|
17 %
|
18 %
|
|
"Big 3" Segments
Combined(1)
|
|
1,218
|
1,108
|
|
10 %
|
10 %
|
|
Reuters
News
|
|
74
|
81
|
|
-9 %
|
-17 %
|
|
Global
Print
|
|
103
|
103
|
|
0 %
|
1 %
|
|
Corporate
costs
|
|
(56)
|
(131)
|
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$1,339
|
$1,161
|
|
15 %
|
15 %
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin(1)
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
46.7 %
|
43.6 %
|
|
310bp
|
280bp
|
|
Corporates
|
|
38.2 %
|
37.8 %
|
|
40bp
|
40bp
|
|
Tax &
Accounting Professionals
|
|
45.7 %
|
43.2 %
|
|
250bp
|
220bp
|
|
"Big 3" Segments
Combined(1)
|
|
44.0 %
|
41.8 %
|
|
220bp
|
200bp
|
|
Reuters
News
|
|
20.0 %
|
22.2 %
|
|
-220bp
|
-430bp
|
|
Global
Print
|
|
38.1 %
|
36.2 %
|
|
190bp
|
170bp
|
|
Adjusted EBITDA
margin
|
|
39.4 %
|
35.3 %
|
|
410bp
|
380bp
|
|
|
|
|
|
|
|
|
|
(1) See the
"Non-IFRS Financial Measures" section and the tables appended to
this news release for additional information on these and
other non-IFRS financial measures. To compute segment and
consolidated adjusted EBITDA margin, the Company excludes
fair value
adjustments related to acquired deferred
revenues.
(2) Computed
for revenue growth only.
n/a: not
applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Outlook
The company is maintaining its 2023 outlook except for updates
to its tax rate, interest expense, and accrued capital expenditures
as a percentage of revenues as follows:
- The outlook for the 2023 effective tax rate has been reduced to
approximately 17% from the prior forecast of approximately 18%,
reflecting a second quarter benefit from the settlement of a prior
year tax audit.
- Interest expense is now expected to be approximately
$190 million, which is the low end of
the previously communicated range of $190 to $210
million, reflecting the accelerated pace of LSEG
monetization and the benefit from higher interest rates on our cash
balances.
- Lastly, the outlook for accrued capital expenditures as a
percent of revenues has been increased to approximately 8%, from
the prior forecast of approximately 7% plus $30 million non-recurring real estate spend. The
updated outlook includes the previously forecasted real estate
optimization spend and additional investments to accelerate Thomson
Reuters AI focused growth strategies.
The table below sets forth the company's updated outlook, which
assumes constant currency rates and excludes the impact of any
future acquisitions or dispositions that may occur during the year.
Thomson Reuters believes that this type of guidance provides useful
insight into the anticipated performance of its businesses.
The company expects its third-quarter 2023 organic revenue
growth rate to be at the high end of the full year 5.5% - 6.0%
range, and its adjusted EBITDA margin to be approximately 36%,
reflecting typical margin seasonality, the normalization of cost
timing that benefited Q2 margins, and also higher SurePrep
integration expenses.
While the company's performance during the first half of 2023
provides it with increasing confidence about its outlook, the
macroeconomic backdrop remains uncertain with many signs that point
to a weakening global economic environment, amid rising interest
rates, high inflation, and ongoing geopolitical risks. Any
worsening of the global economic or business environment could
impact the company's ability to achieve its outlook.
Reported Full-Year 2022 and Updated Full-Year 2023
Outlook
Total Thomson
Reuters
|
FY
2022
Reported
|
FY
2023
Outlook
2/9/23
|
FY
2023
Outlook
5/2/23
|
FY
2023
Outlook
8/2/23
|
Total Revenue
Growth
|
4 %
|
4.5% - 5.0%
|
3.0% - 3.5%
|
Unchanged
|
Organic Revenue
Growth(1)
|
6 %
|
5.5% - 6.0%
|
Unchanged
|
Unchanged
|
Adjusted EBITDA
Margin(1)
|
35.1 %
|
~ 39%
|
Unchanged
|
Unchanged
|
Corporate
Costs
Core Corporate Costs
Change Program
Opex
|
$293 million
$122 million
$171 million
|
$110 - $120
million
$110 - $120
million
n/a
|
Unchanged
|
Unchanged
|
Free Cash
Flow(1)
|
$1.3 billion
|
~$1.8
billion
|
Unchanged
|
Unchanged
|
Accrued Capex as % of
Revenue(1)
Real Estate Optimization
Spend(2)
|
8.2%
n/a
|
~ 7%
$30 million
|
Unchanged
|
~ 8%
n/a
|
Depreciation &
Amortization of Computer
Software
|
$625 million
|
$595 - $625
million
|
Unchanged
|
Unchanged
|
Interest Expense
(P&L)
|
$196 million
|
$190 - $210
million
|
Unchanged
|
~$190
Million
|
Effective Tax Rate on
Adjusted Earnings(1)
|
17.6 %
|
~ 18%
|
Unchanged
|
~17%
|
"Big 3"
Segments(1)
|
FY
2022
Reported
|
FY
2023
Outlook
2/9/23
|
FY
2023
Outlook
5/2/23
|
FY
2023
Outlook
8/2/23
|
Total Revenue Growth
|
5 %
|
5.5% - 6.0%
|
3.5% - 4.0%
|
Unchanged
|
Organic Revenue
Growth
|
7 %
|
6.5% - 7.0%
|
Unchanged
|
Unchanged
|
Adjusted EBITDA
Margin
|
42.4 %
|
~ 44%
|
Unchanged
|
Unchanged
|
|
|
(1)
|
Non-IFRS financial
measures. See the "Non-IFRS Financial Measures" section below as
well as the tables and footnotes appended to this news release for
more information.
|
(2)
|
Real estate
optimization spend in 2023 was incremental to the Accrued Capex as
a percent of revenue outlook, as presented on February 9 and May 2
of 2023.
|
The information in this section is forward-looking. Actual
results, which will include the impact of currency and future
acquisitions and dispositions completed during 2023, may differ
materially from the company's outlook. 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."
Thomson Reuters and TPG establish Elite as an Independent
Legal Technology Company
In June 2023, TPG acquired a
majority stake in Thomson Reuters' Elite business, which provides
financial and practice management solutions to the world's leading
law firms, helping customers automate and streamline critical
finance and accounting workflows. The company received proceeds of
$418 million and retained a 19.9%
minority interest and board representation in the business,
supporting Elite strategically going forward. TPG Capital, TPG's
U.S. and European late-stage private equity business, is now the
majority shareholder of the standalone business.
London Stock Exchange Group plc (LSEG) Ownership
Interest
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. During
the second quarter of 2023, the company sold 15.5 million shares
that it indirectly owned for $1.6
billion of gross proceeds. As of July
31, 2023, Thomson Reuters indirectly owned approximately
31.8 million LSEG shares, which had a market value of approximately
$3.5 billion based on LSEG's closing
share price on that day.
Return of Capital and Share Consolidation
In June 2023, the company returned
approximately $2.0 billion of gross
proceeds related to the disposition of shares in LSEG to
shareholders, and reduced its common shares outstanding by 15.8
million, in accordance with its previously announced plans. The
return of capital transaction consisted of a cash distribution of
$4.67 per common share and a share
consolidation, or "reverse stock split", which reduced the number
of outstanding common shares at a ratio of 1 pre-consolidated share
for 0.963957 post-consolidated shares, which was proportional to
the cash distribution.
Acquisitions
In June 2023, the company signed a
definitive agreement to acquire Casetext for $650 million. Casetext uses artificial
intelligence and machine learning, which enable legal professionals
to work more efficiently. The company expects the acquisition to
close by the end of 2023, subject to specified regulatory approvals
and customary closing conditions.
In July 2023, the Company acquired
Imagen Ltd, a media asset management company, which will be part of
the Reuters News segment.
Dividends
In February 2023, the company
announced a 10% or $0.18 per share
annualized increase in the dividend to $1.96 per common share, representing the 30th
consecutive year of dividend increases. A quarterly dividend of
$0.49 per share is payable on
September 15, 2023 to common
shareholders of record as of August 17,
2023.
As of July 31, 2023, Thomson
Reuters had approximately 455.3 million common shares
outstanding.
Thomson Reuters
Thomson Reuters (NYSE / TSX: TRI) informs the way forward
by bringing together the trusted content and technology that people
and organizations need to make the right decisions. The company
serves professionals across legal, tax, accounting, compliance,
government, and media. Its products combine highly specialized
software and insights to empower professionals with the data,
intelligence, and solutions needed to make informed decisions, and
to help institutions in their pursuit of justice, truth and
transparency. Reuters, part of Thomson Reuters, is a world leading
provider of trusted journalism and news. For more information,
visit tr.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, which include ratios that incorporate one or more
non-IFRS financial measures, such as adjusted EBITDA (other than at
the customer segment level) and the related margin, free cash flow,
adjusted EPS and the effective tax rate on adjusted EPS, accrued
capital expenditures expressed as a percentage of revenues,
selected measures excluding the impact of foreign currency, changes
in revenues computed on an organic basis as well as all financial
measures for the "Big 3" segments. Thomson Reuters uses these
non-IFRS financial measures as supplemental indicators of its
operating performance and financial position as well as for
internal planning purposes and the company's business outlook.
Additionally, Thomson Reuters uses non-IFRS measures as the basis
for management incentive programs. 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 directly comparable
IFRS measures because it cannot predict, with reasonable certainty,
the 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 and foreign exchange
contracts. Additionally, the company cannot reasonably predict
(i) its share of post-tax earnings or 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 "2023
Outlook" and "Acquisitions" sections and the company's expectations
regarding Legal Professionals, Corporates and Global Print, 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 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.
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 19-33 in the "Risk
Factors" section of the company's 2022 annual report. 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, 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. In particular, the global economy has experienced
substantial disruption due to concerns regarding economic effects
associated with the macroeconomic backdrop and ongoing geopolitical
risks. The company's business outlook assumes that uncertain
macroeconomic and geopolitical conditions will continue to disrupt
the economy and cause periods of volatility, however, these
conditions may last substantially longer than expected and any
worsening of the global economic or business environment could
impact the company's ability to achieve its outlook and affect its
results and other expectations. For a discussion of material
assumptions and material risks related to the company's 2023
outlook, please see page 20 of the company's first-quarter
management's discussion and analysis (MD&A) for the period
ended March 31, 2023. The
company's quarterly MD&A and annual report are filed with, or
furnished to, the Canadian securities regulatory authorities and
the U.S. SEC and are 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.
CONTACTS
MEDIA
Andrew Green
Senior Director,
Corporate Affairs
+1 332 219
1511
andrew.green@tr.com
|
INVESTORS
Gary Bisbee,
CFA
Head of Investor
Relations
+1 646 540
3249
gary.bisbee@tr.com
|
Thomson Reuters will webcast a discussion of its
second-quarter 2023 results and its 2023 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
Consolidated Income
Statement
(millions of U.S.
dollars, except per share data)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
2022
|
|
2023
|
2022
|
CONTINUING
OPERATIONS
|
|
|
|
|
|
Revenues
|
$1,647
|
$1,614
|
|
$3,385
|
$3,288
|
Operating
expenses
|
(990)
|
(1,041)
|
|
(2,064)
|
(2,122)
|
Depreciation
|
(29)
|
(38)
|
|
(59)
|
(76)
|
Amortization of
computer software
|
(127)
|
(121)
|
|
(245)
|
(235)
|
Amortization of other
identifiable intangible assets
|
(23)
|
(25)
|
|
(48)
|
(51)
|
Other operating gains,
net
|
347
|
2
|
|
364
|
1
|
Operating
profit
|
825
|
391
|
|
1,333
|
805
|
Finance costs,
net:
|
|
|
|
|
|
Net interest
expense
|
(34)
|
(49)
|
|
(89)
|
(97)
|
Other finance (costs)
income
|
(102)
|
320
|
|
(192)
|
414
|
Income before tax and
equity method investments
|
689
|
662
|
|
1,052
|
1,122
|
Share of post-tax
earnings (losses) in equity method
investments
|
419
|
(825)
|
|
989
|
(27)
|
Tax (expense)
benefit
|
(219)
|
92
|
|
(415)
|
(148)
|
Earnings (loss) from
continuing operations
|
889
|
(71)
|
|
1,626
|
947
|
Earnings (loss) from
discontinued operations, net of tax
|
5
|
(44)
|
|
24
|
(55)
|
Net earnings
(loss)
|
$894
|
$(115)
|
|
$1,650
|
$892
|
Earnings (loss)
attributable to common shareholders
|
$894
|
$(115)
|
|
$1,650
|
$892
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
|
|
From
continuing operations
|
$1.89
|
$(0.15)
|
|
$3.44
|
$1.94
|
From
discontinued operations
|
0.01
|
(0.09)
|
|
0.05
|
(0.11)
|
Basic earnings (loss)
per share
|
$1.90
|
$(0.24)
|
|
$3.49
|
$1.83
|
|
|
|
|
|
|
Diluted earnings (loss)
per share:
|
|
|
|
|
|
From
continuing operations
|
$1.89
|
$(0.15)
|
|
$3.43
|
$1.94
|
From
discontinued operations
|
0.01
|
(0.09)
|
|
0.06
|
(0.11)
|
Diluted earnings (loss)
per share
|
$1.90
|
$(0.24)
|
|
$3.49
|
$1.83
|
|
|
|
|
|
|
Basic weighted-average
common shares
|
469,756,868
|
487,171,400
|
|
471,495,910
|
486,929,681
|
Diluted
weighted-average common shares
|
470,382,600
|
487,171,400
|
|
472,509,030
|
487,713,813
|
|
|
|
|
|
|
|
|
|
Thomson Reuters
Corporation
Consolidated
Statement of Financial Position
(millions of U.S.
dollars)
(unaudited)
|
|
|
June
30,
|
|
December
31,
|
2023
|
|
2022
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$2,858
|
|
$1,069
|
Trade and other
receivables
|
1,000
|
|
1,069
|
Other financial
assets
|
104
|
|
204
|
Prepaid expenses and
other current assets
|
472
|
|
469
|
Current
assets
|
4,434
|
|
2,811
|
|
|
|
|
Property and equipment,
net
|
402
|
|
414
|
Computer software,
net
|
1,067
|
|
922
|
Other identifiable
intangible assets, net
|
3,189
|
|
3,219
|
Goodwill
|
6,190
|
|
5,882
|
Equity method
investments
|
3,477
|
|
6,199
|
Other financial
assets
|
448
|
|
527
|
Other non-current
assets
|
610
|
|
619
|
Deferred tax
|
1,072
|
|
1,118
|
Total
assets
|
$20,889
|
|
$21,711
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Liabilities
|
|
|
|
Current
indebtedness
|
$2,440
|
|
$1,647
|
Payables, accruals and
provisions
|
933
|
|
1,222
|
Current tax
liabilities
|
479
|
|
324
|
Deferred
revenue
|
942
|
|
886
|
Other financial
liabilities
|
124
|
|
812
|
Current
liabilities
|
4,918
|
|
4,891
|
|
|
|
|
Long-term
indebtedness
|
3,141
|
|
3,114
|
Provisions and other
non-current liabilities
|
675
|
|
691
|
Other financial
liabilities
|
202
|
|
233
|
Deferred tax
|
752
|
|
897
|
Total
liabilities
|
9,688
|
|
9,826
|
|
|
|
|
Equity
|
|
|
|
Capital
|
3,368
|
|
5,398
|
Retained
earnings
|
8,836
|
|
7,642
|
Accumulated other
comprehensive loss
|
(1,003)
|
|
(1,155)
|
Total
equity
|
11,201
|
|
11,885
|
Total liabilities
and equity
|
$20,889
|
|
$21,711
|
Thomson Reuters
Corporation
Consolidated
Statement of Cash Flow
(millions of U.S.
dollars)
(unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2023
|
2022
|
|
2023
|
2022
|
Cash provided by
(used in):
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
$889
|
$(71)
|
|
$1,626
|
$947
|
Adjustments
for:
|
|
|
|
|
|
Depreciation
|
29
|
38
|
|
59
|
76
|
Amortization of
computer software
|
127
|
121
|
|
245
|
235
|
Amortization of other
identifiable intangible assets
|
23
|
25
|
|
48
|
51
|
Net (gains) losses on
disposals of businesses and investments
|
(348)
|
1
|
|
(347)
|
1
|
Share of post-tax
(earnings) losses in equity method investments
|
(419)
|
825
|
|
(989)
|
27
|
Deferred
tax
|
9
|
(183)
|
|
(118)
|
(17)
|
Other
|
146
|
(286)
|
|
277
|
(325)
|
Changes in working
capital and other items
|
240
|
(25)
|
|
160
|
(216)
|
Operating cash flows
from continuing operations
|
696
|
445
|
|
961
|
779
|
Operating cash flows
from discontinued operations
|
(1)
|
(12)
|
|
1
|
(71)
|
Net cash provided by
operating activities
|
695
|
433
|
|
962
|
708
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(33)
|
(163)
|
|
(523)
|
(171)
|
Proceeds from disposals
of businesses and investments
|
418
|
-
|
|
418
|
-
|
Proceeds from sales of
LSEG shares
|
1,583
|
-
|
|
3,876
|
-
|
Capital
expenditures
|
(127)
|
(137)
|
|
(267)
|
(308)
|
Other investing
activities
|
45
|
62
|
|
68
|
62
|
Taxes paid on sales of
LSEG shares and disposals of businesses
|
(252)
|
-
|
|
(270)
|
-
|
Investing cash flows
from continuing operations
|
1,634
|
(238)
|
|
3,302
|
(417)
|
Investing cash flows
from discontinued operations
|
(1)
|
(16)
|
|
(1)
|
(16)
|
Net cash provided by
(used in) investing activities
|
1,633
|
(254)
|
|
3,301
|
(433)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Net borrowings under
short-term loan facilities
|
1,132
|
50
|
|
771
|
50
|
Payments of lease
principal
|
(15)
|
(16)
|
|
(31)
|
(33)
|
Payments for return of
capital on common shares
|
(2,045)
|
-
|
|
(2,045)
|
-
|
Repurchases of common
shares
|
-
|
(194)
|
|
(718)
|
(194)
|
Dividends paid on
preference shares
|
(2)
|
-
|
|
(3)
|
(1)
|
Dividends paid on
common shares
|
(230)
|
(210)
|
|
(454)
|
(419)
|
Other financing
activities
|
-
|
2
|
|
5
|
9
|
Net cash used in
financing activities
|
(1,160)
|
(368)
|
|
(2,475)
|
(588)
|
Translation
adjustments
|
-
|
(4)
|
|
1
|
(4)
|
Increase (decrease) in
cash and cash equivalents
|
1,168
|
(193)
|
|
1,789
|
(317)
|
Cash and cash
equivalents at beginning of period
|
1,690
|
654
|
|
1,069
|
778
|
Cash and cash
equivalents at end of period
|
$2,858
|
$461
|
|
$2,858
|
$461
|
Thomson Reuters
Corporation
|
Reconciliation of
Earnings (Loss) from Continuing Operations to Adjusted
EBITDA(1)
|
(millions
of U.S. dollars, except for
margins)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
Year
Ended
|
June
30,
|
|
|
|
June
30,
|
|
December
31,
|
|
2023
|
2022
|
|
|
2023
|
2022
|
|
2022
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
$889
|
$(71)
|
|
|
$1,626
|
$947
|
|
$1,391
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
|
Tax expense
(benefit)
|
219
|
(92)
|
|
|
415
|
148
|
|
259
|
Other finance costs
(income)
|
102
|
(320)
|
|
|
192
|
(414)
|
|
(444)
|
Net interest
expense
|
34
|
49
|
|
|
89
|
97
|
|
196
|
Amortization of other
identifiable intangible assets
|
23
|
25
|
|
|
48
|
51
|
|
99
|
Amortization of
computer software
|
127
|
121
|
|
|
245
|
235
|
|
485
|
Depreciation
|
29
|
38
|
|
|
59
|
76
|
|
140
|
EBITDA
|
$1,423
|
$(250)
|
|
|
$2,674
|
$1,140
|
|
$2,126
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
|
Share of post-tax
(earnings) losses in equity
method
investments
|
(419)
|
825
|
|
|
(989)
|
27
|
|
432
|
Other operating gains,
net
|
(347)
|
(2)
|
|
|
(364)
|
(1)
|
|
(211)
|
Fair value
adjustments*
|
5
|
(12)
|
|
|
18
|
(5)
|
|
(18)
|
Adjusted
EBITDA(1)
|
$662
|
$561
|
|
|
$1,339
|
$1,161
|
|
$2,329
|
Adjusted EBITDA
margin(1)
|
40.1 %
|
34.7 %
|
|
|
39.4 %
|
35.3 %
|
|
35.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Fair value
adjustments primarily represent gains or losses on intercompany
balances that arise in the ordinary course of business due to
changes in foreign currency exchange rates, which are a component
of operating expenses, as well as adjustments related to acquired
deferred revenue.
|
Thomson Reuters
Corporation
|
Reconciliation of
Net Cash Provided By Operating Activities to Free Cash
Flow(1)
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Year
Ended
|
June
30,
|
|
June
30,
|
|
December
31,
|
|
2023
|
2022
|
|
2023
|
2022
|
|
2022
|
Net cash provided by
operating activities
|
$695
|
$433
|
|
$962
|
$708
|
|
$1,915
|
Capital
expenditures
|
(127)
|
(137)
|
|
(267)
|
(308)
|
|
(595)
|
Other investing
activities
|
45
|
62
|
|
68
|
62
|
|
88
|
Payments of lease
principal
|
(15)
|
(16)
|
|
(31)
|
(33)
|
|
(65)
|
Dividends paid on
preference shares
|
(2)
|
-
|
|
(3)
|
(1)
|
|
(3)
|
Free cash
flow(1)
|
$596
|
$342
|
|
$729
|
$428
|
|
$1,340
|
Thomson Reuters
Corporation
|
Reconciliation of
Capital Expenditures to Accrued Capital
Expenditures(1)
|
(millions of
U.S. dollars)
|
(unaudited)
|
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
|
|
2022
|
Capital
expenditures
|
|
|
|
$595
|
Remove: IFRS adjustment
to cash basis
|
|
|
|
(50)
|
Accrued capital
expenditures (1)
|
|
|
|
$545
|
Accrued capital
expenditures as a percentage of
revenues(1)
|
|
|
|
8.2 %
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to page 23 for
additional information on non-IFRS financial measures.
|
Thomson Reuters
Corporation
|
|
Reconciliation of
Net Earnings (Loss) to Adjusted
Earnings(1)
|
|
Reconciliation of
Total Change in Adjusted EPS to Change in Constant
Currency(1)
|
|
(millions of
U.S. dollars, except for share and per
share data)
|
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
June
30,
|
Six Months
Ended
June
30,
|
Year
Ended
|
|
|
December
31,
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
2022
|
|
Net earnings
(loss)
|
$894
|
$(115)
|
|
$1,650
|
$892
|
|
$1,338
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
|
Fair value
adjustments*
|
5
|
(12)
|
|
18
|
(5)
|
|
(18)
|
|
Amortization of other
identifiable intangible assets
|
23
|
25
|
|
48
|
51
|
|
99
|
|
Other operating gains,
net
|
(347)
|
(2)
|
|
(364)
|
(1)
|
|
(211)
|
|
Other finance costs
(income)
|
102
|
(320)
|
|
192
|
(414)
|
|
(444)
|
|
Share of post-tax
(earnings) losses in equity method investments
|
(419)
|
825
|
|
(989)
|
27
|
|
432
|
|
Tax on above
items(1)
|
153
|
(155)
|
|
265
|
51
|
|
(22)
|
|
Tax items impacting
comparability(1)
|
(2)
|
(1)
|
|
(2)
|
(45)
|
|
15
|
|
(Earnings) loss from
discontinued operations, net of tax
|
(5)
|
44
|
|
(24)
|
55
|
|
53
|
|
Interim period
effective tax rate normalization(1)
|
(5)
|
2
|
|
(3)
|
3
|
|
-
|
|
Dividends declared on
preference shares
|
(2)
|
-
|
|
(3)
|
(1)
|
|
(3)
|
|
Adjusted
earnings(1)
|
$397
|
$291
|
|
$788
|
$613
|
|
$1,239
|
|
Adjusted
EPS(1)
|
$0.84
|
$0.60
|
|
$1.67
|
$1.26
|
|
|
|
Total
change
|
40 %
|
|
|
33 %
|
|
|
|
|
Foreign
currency
|
0 %
|
|
|
0 %
|
|
|
|
|
Constant
currency
|
40 %
|
|
|
33 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares (millions)**
|
470.4
|
487.9
|
|
472.5
|
487.7
|
|
|
|
|
|
|
|
Reconciliation of Effective Tax Rate on Adjusted
Earnings(1)
|
Year-ended
December 31,
|
|
|
2022
|
|
Adjusted
earnings
|
$1,239
|
|
Plus:
Dividends declared on preference shares
|
3
|
|
Plus: Tax
expense on adjusted earnings
|
266
|
|
Pre-Tax
Adjusted earnings
|
$1,508
|
|
|
|
|
IFRS Tax
expense
|
$259
|
|
Remove tax related
to:
|
|
|
Amortization of other identifiable intangible
assets
|
22
|
|
Share of post-tax losses in equity method
investments
|
124
|
|
Other finance income
|
(80)
|
|
Other operating gains, net
|
(42)
|
|
Other items
|
(2)
|
|
Subtotal –
Remove tax benefit on pre-tax items removed from adjusted
earnings
|
22
|
|
Remove: Tax
items impacting comparability
|
(15)
|
|
Total: Remove
all items above impacting comparability
|
7
|
|
Tax expense
on adjusted earnings
|
$266
|
|
Effective
tax rate on adjusted earnings
|
17.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
* Fair value
adjustments primarily represent gains or losses on
intercompany balances that arise in the ordinary course of business
due to changes in foreign currency exchange rates, which are a
component of operating expenses, as well as adjustments related to
acquired deferred revenue.
|
** Refer to page 18
for a reconciliation of weighted-average diluted shares used in
adjusted EPS.
|
|
|
(1)
|
Refer to page 23 for
additional information on non-IFRS financial measures.
|
Reconciliation of weighted-average diluted shares used in
adjusted EPS
Because Thomson Reuters reported a net loss from continuing
operations under IFRS for the three months ended June 30, 2022, 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 June 30, 2022
|
|
IFRS: Basic and
Diluted
|
487,171,400
|
|
Effect of stock options
and other equity incentive awards
|
772,342
|
|
Non-IFRS
Diluted
|
487,943,742
|
|
Thomson Reuters
Corporation
|
Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant
Currency(1) and Organic
Basis(1)
|
(millions of
U.S. dollars)
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
2023
|
2022
|
|
Total
|
Foreign
Currency
|
SUBTOTAL
Constant
Currency
|
Net
Acquisitions/
(Divestitures)
|
Organic
|
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$705
|
$700
|
|
1 %
|
0 %
|
1 %
|
-4 %
|
6 %
|
|
Corporates
|
|
392
|
373
|
|
5 %
|
0 %
|
5 %
|
-2 %
|
7 %
|
|
Tax &
Accounting Professionals
|
|
229
|
217
|
|
5 %
|
-2 %
|
7 %
|
-3 %
|
10 %
|
|
"Big 3" Segments
Combined(1)
|
|
1,326
|
1,290
|
|
3 %
|
-1 %
|
3 %
|
-3 %
|
7 %
|
|
Reuters
News
|
|
194
|
188
|
|
3 %
|
1 %
|
2 %
|
0 %
|
1 %
|
|
Global
Print
|
|
133
|
142
|
|
-6 %
|
-1 %
|
-5 %
|
-1 %
|
-4 %
|
|
Eliminations/Rounding
|
|
(6)
|
(6)
|
|
|
|
|
|
|
|
Revenues
|
|
$1,647
|
$1,614
|
|
2 %
|
0 %
|
2 %
|
-3 %
|
5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$667
|
$656
|
|
2 %
|
0 %
|
2 %
|
-3 %
|
5 %
|
|
Corporates
|
|
340
|
322
|
|
5 %
|
0 %
|
5 %
|
-3 %
|
8 %
|
|
Tax &
Accounting Professionals
|
|
167
|
167
|
|
0 %
|
-1 %
|
1 %
|
-8 %
|
9 %
|
|
"Big 3" Segments
Combined(1)
|
|
1,174
|
1,145
|
|
2 %
|
0 %
|
3 %
|
-4 %
|
7 %
|
|
Reuters
News
|
|
155
|
152
|
|
2 %
|
0 %
|
2 %
|
0 %
|
2 %
|
|
Eliminations/Rounding
|
|
(6)
|
(6)
|
|
|
|
|
|
|
|
Total Recurring
Revenues
|
|
$1,323
|
$1,291
|
|
2 %
|
0 %
|
3 %
|
-3 %
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$38
|
$44
|
|
-13 %
|
-1 %
|
-12 %
|
-24 %
|
12 %
|
|
Corporates
|
|
52
|
51
|
|
3 %
|
0 %
|
2 %
|
3 %
|
-1 %
|
|
Tax &
Accounting Professionals
|
|
62
|
50
|
|
24 %
|
-3 %
|
27 %
|
15 %
|
12 %
|
|
"Big 3" Segments
Combined(1)
|
|
152
|
145
|
|
5 %
|
-1 %
|
6 %
|
-1 %
|
7 %
|
|
Reuters
News
|
|
39
|
36
|
|
5 %
|
5 %
|
0 %
|
0 %
|
0 %
|
|
Total Transactions
Revenues
|
|
$191
|
$181
|
|
5 %
|
0 %
|
5 %
|
-1 %
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
(1)
|
Refer to page 23 for
additional information on non-IFRS financial measures.
|
Thomson Reuters
Corporation
|
Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant
Currency(1) and Organic
Basis(1)
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
2023
|
2022
|
|
Total
|
Foreign
Currency
|
SUBTOTAL
Constant
Currency
|
Net
Acquisitions/
(Divestitures)
|
Organic
|
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$1,419
|
$1,398
|
|
2 %
|
-1 %
|
2 %
|
-3 %
|
6 %
|
|
Corporates
|
|
827
|
784
|
|
5 %
|
-1 %
|
6 %
|
-2 %
|
8 %
|
|
Tax &
Accounting Professionals
|
|
511
|
470
|
|
9 %
|
-1 %
|
10 %
|
0 %
|
10 %
|
|
"Big 3" Segments
Combined(1)
|
|
2,757
|
2,652
|
|
4 %
|
-1 %
|
5 %
|
-2 %
|
7 %
|
|
Reuters
News
|
|
369
|
364
|
|
1 %
|
0 %
|
1 %
|
0 %
|
1 %
|
|
Global
Print
|
|
271
|
284
|
|
-5 %
|
-1 %
|
-3 %
|
-1 %
|
-2 %
|
|
Eliminations/Rounding
|
|
(12)
|
(12)
|
|
|
|
|
|
|
|
Revenues
|
|
$3,385
|
$3,288
|
|
3 %
|
-1 %
|
4 %
|
-2 %
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$1,339
|
$1,309
|
|
2 %
|
-1 %
|
3 %
|
-2 %
|
6 %
|
|
Corporates
|
|
666
|
638
|
|
4 %
|
-1 %
|
5 %
|
-3 %
|
8 %
|
|
Tax &
Accounting Professionals
|
|
343
|
349
|
|
-2 %
|
-1 %
|
-1 %
|
-8 %
|
7 %
|
|
"Big 3" Segments
Combined(1)
|
|
2,348
|
2,296
|
|
2 %
|
-1 %
|
3 %
|
-3 %
|
6 %
|
|
Reuters
News
|
|
310
|
307
|
|
1 %
|
-1 %
|
2 %
|
0 %
|
2 %
|
|
Eliminations/Rounding
|
|
(12)
|
(12)
|
|
|
|
|
|
|
|
Total Recurring
Revenues
|
|
$2,646
|
$2,591
|
|
2 %
|
-1 %
|
3 %
|
-3 %
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$80
|
$89
|
|
-9 %
|
-1 %
|
-9 %
|
-13 %
|
5 %
|
|
Corporates
|
|
161
|
146
|
|
10 %
|
0 %
|
10 %
|
3 %
|
7 %
|
|
Tax &
Accounting Professionals
|
|
168
|
121
|
|
39 %
|
-2 %
|
41 %
|
24 %
|
17 %
|
|
"Big 3" Segments
Combined(1)
|
|
409
|
356
|
|
15 %
|
-1 %
|
16 %
|
6 %
|
10 %
|
|
Reuters
News
|
|
59
|
57
|
|
3 %
|
4 %
|
-1 %
|
0 %
|
-1 %
|
|
Total Transactions
Revenues
|
|
$468
|
$413
|
|
13 %
|
0 %
|
14 %
|
5 %
|
9 %
|
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
|
December
31,
|
|
Change
|
|
|
2022
|
2021
|
|
Total
|
Foreign
Currency
|
SUBTOTAL
Constant
Currency
|
Net
Acquisitions/
(Divestitures)
|
Organic
|
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$2,803
|
$2,712
|
|
3 %
|
-2 %
|
5 %
|
-1 %
|
6 %
|
|
Corporates
|
|
1,536
|
1,440
|
|
7 %
|
-1 %
|
8 %
|
0 %
|
8 %
|
|
Tax &
Accounting Professionals
|
|
986
|
915
|
|
8 %
|
-1 %
|
8 %
|
-1 %
|
9 %
|
|
"Big 3" Segments
Combined(1)
|
|
5,325
|
5,067
|
|
5 %
|
-1 %
|
6 %
|
-1 %
|
7 %
|
|
Reuters
News
|
|
733
|
694
|
|
6 %
|
-3 %
|
9 %
|
0 %
|
9 %
|
|
Global
Print
|
|
592
|
609
|
|
-3 %
|
-2 %
|
-1 %
|
0 %
|
-1 %
|
|
Eliminations/Rounding
|
|
(23)
|
(22)
|
|
|
|
|
|
|
|
Revenues
|
|
$6,627
|
$6,348
|
|
4 %
|
-2 %
|
6 %
|
0 %
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. Amounts for
the six-month period ended June 2023 reflect a revision of $3
million between recurring and transactions revenues related to the
first quarter of 2023.
|
|
|
(1)
|
Refer to page 23 for
additional information on non-IFRS financial measures.
|
Thomson Reuters
Corporation
|
Reconciliation of
Changes in Adjusted EBITDA(1) and Related Margin
(1) to Changes on a Constant
Currency Basis(1)
|
(millions of
U.S. dollars, except for
margins)
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30,
|
|
Change
|
|
|
|
2023
|
2022
|
|
Total
|
Foreign
Currency
|
Constant
Currency
|
|
Adjusted
EBITDA(1)
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$345
|
$304
|
|
14 %
|
0 %
|
14 %
|
|
Corporates
|
|
163
|
139
|
|
17 %
|
0 %
|
17 %
|
|
Tax &
Accounting Professionals
|
|
89
|
81
|
|
10 %
|
-2 %
|
11 %
|
|
"Big 3" Segments
Combined(1)
|
|
597
|
524
|
|
14 %
|
-1 %
|
14 %
|
|
Reuters
News
|
|
45
|
44
|
|
2 %
|
9 %
|
-7 %
|
|
Global
Print
|
|
53
|
50
|
|
5 %
|
0 %
|
5 %
|
|
Corporate
costs
|
|
(33)
|
(57)
|
|
n/a
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$662
|
$561
|
|
18 %
|
0 %
|
18 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin(1)
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
48.9 %
|
43.4 %
|
|
550bp
|
10bp
|
540bp
|
|
Corporates
|
|
41.6 %
|
37.4 %
|
|
420bp
|
-10bp
|
430bp
|
|
Tax &
Accounting Professionals
|
|
38.5 %
|
37.4 %
|
|
110bp
|
0bp
|
110bp
|
|
"Big 3" Segments
Combined(1)
|
|
44.9 %
|
40.7 %
|
|
420bp
|
-10bp
|
430bp
|
|
Reuters
News
|
|
23.1 %
|
23.3 %
|
|
-20bp
|
190bp
|
-210bp
|
|
Global
Print
|
|
39.7 %
|
35.4 %
|
|
430bp
|
40bp
|
390bp
|
|
Adjusted EBITDA
margin
|
|
40.1 %
|
34.7 %
|
|
540bp
|
10bp
|
530bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomson Reuters
Corporation
|
Reconciliation of
Changes in Adjusted EBITDA(1) and Related Margin
(1) to Changes on a Constant
Currency Basis(1)
|
(millions of
U.S. dollars, except for
margins)
|
(unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
Change
|
|
|
|
2023
|
2022
|
|
Total
|
Foreign
Currency
|
Constant
Currency
|
|
Adjusted
EBITDA(1)
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$663
|
$609
|
|
9 %
|
0 %
|
9 %
|
|
Corporates
|
|
317
|
296
|
|
7 %
|
-1 %
|
7 %
|
|
Tax &
Accounting Professionals
|
|
238
|
203
|
|
17 %
|
-1 %
|
18 %
|
|
"Big 3" Segments
Combined(1)
|
|
1,218
|
1,108
|
|
10 %
|
0 %
|
10 %
|
|
Reuters
News
|
|
74
|
81
|
|
-9 %
|
8 %
|
-17 %
|
|
Global
Print
|
|
103
|
103
|
|
0 %
|
-1 %
|
1 %
|
|
Corporate
costs
|
|
(56)
|
(131)
|
|
n/a
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$1,339
|
$1,161
|
|
15 %
|
0 %
|
15 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin(1)
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
46.7 %
|
43.6 %
|
|
310bp
|
30bp
|
280bp
|
|
Corporates
|
|
38.2 %
|
37.8 %
|
|
40bp
|
0bp
|
40bp
|
|
Tax &
Accounting Professionals
|
|
45.7 %
|
43.2 %
|
|
250bp
|
30bp
|
220bp
|
|
"Big 3" Segments
Combined(1)
|
|
44.0 %
|
41.8 %
|
|
220bp
|
20bp
|
200bp
|
|
Reuters
News
|
|
20.0 %
|
22.2 %
|
|
-220bp
|
210bp
|
-430bp
|
|
Global
Print
|
|
38.1 %
|
36.2 %
|
|
190bp
|
20bp
|
170bp
|
|
Adjusted EBITDA
margin
|
|
39.4 %
|
35.3 %
|
|
410bp
|
30bp
|
380bp
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
(1)
|
Refer to page 23 for
additional information on non-IFRS financial measures.
|
Reconciliation of adjusted EBITDA margin
To compute segment and consolidated adjusted EBITDA margin, we
exclude fair value adjustments related to acquired deferred revenue
from our IFRS revenues. The chart below reconciles IFRS revenues to
revenues used in the calculation of adjusted EBITDA margin, which
excludes fair value adjustments related to acquired deferred
revenue.
Three months ended
June 30, 2023
|
|
IFRS
revenues
|
Remove fair
value
adjustments to
acquired deferred
revenue
|
Revenues
excluding
fair value
adjustments to
acquired deferred
revenue
|
|
Adjusted
EBITDA
|
Adjusted EBITDA
Margin
|
Legal
Professionals
|
$705
|
-
|
$705
|
|
$345
|
48.9 %
|
Corporates
|
392
|
$1
|
393
|
|
163
|
41.6 %
|
Tax & Accounting
Professionals
|
229
|
3
|
232
|
|
89
|
38.5 %
|
"Big 3" Segments
Combined
|
1,326
|
4
|
1,330
|
|
597
|
44.9 %
|
Reuters News
|
194
|
-
|
194
|
|
45
|
23.1 %
|
Global Print
|
133
|
-
|
133
|
|
53
|
39.7 %
|
Eliminations/
Rounding
|
(6)
|
-
|
(6)
|
|
-
|
n/a
|
Corporate
costs
|
-
|
-
|
-
|
|
(33)
|
n/a
|
Consolidated
totals
|
$1,647
|
$4
|
$1,651
|
|
$662
|
40.1 %
|
Six months ended
June 30, 2023
|
|
IFRS
revenues
|
Remove fair
value
adjustments to
acquired deferred
revenue
|
Revenues
excluding
fair value
adjustments to
acquired deferred
revenue
|
|
Adjusted
EBITDA
|
Adjusted EBITDA
Margin
|
Legal
Professionals
|
$1,419
|
-
|
$1,419
|
|
$663
|
46.7 %
|
Corporates
|
827
|
$3
|
830
|
|
317
|
38.2 %
|
Tax & Accounting
Professionals
|
511
|
10
|
521
|
|
238
|
45.7 %
|
"Big 3" Segments
Combined
|
2,757
|
13
|
2,770
|
|
1,218
|
44.0 %
|
Reuters News
|
369
|
-
|
369
|
|
74
|
20.0 %
|
Global Print
|
271
|
-
|
271
|
|
103
|
38.1 %
|
Eliminations/
Rounding
|
(12)
|
-
|
(12)
|
|
-
|
n/a
|
Corporate
costs
|
-
|
-
|
-
|
|
(56)
|
n/a
|
Consolidated
totals
|
$3,385
|
$13
|
$3,398
|
|
$1,339
|
39.4 %
|
|
Margins are computed
using whole dollars, as a result, margins calculated from reported
amounts may differ from those presented due to
rounding.
|
n/a: not
applicable
|
Thomson Reuters
Corporation
|
Segment and
Consolidated Adjusted EBITDA(1) and the Related
Margin(1)
|
(millions of
U.S. dollars, except for
margins)
|
(unaudited)
|
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
2022
|
Adjusted
EBITDA(1)
|
|
|
Legal
Professionals
|
|
$1,227
|
Corporates
|
|
578
|
Tax &
Accounting Professionals
|
|
451
|
"Big 3" Segments
Combined(1)
|
|
2,256
|
Reuters
News
|
|
154
|
Global
Print
|
|
212
|
Corporate
costs
|
|
(293)
|
Adjusted
EBITDA
|
|
$2,329
|
|
|
|
Adjusted EBITDA
Margin(1)
|
|
|
Legal
Professionals
|
|
43.8 %
|
Corporates
|
|
37.6 %
|
Tax &
Accounting Professionals
|
|
45.8 %
|
"Big 3" Segments
Combined(1)
|
|
42.4 %
|
Reuters
News
|
|
21.0 %
|
Global
Print
|
|
35.7 %
|
Adjusted EBITDA
margin
|
|
35.1 %
|
|
|
|
Margins are computed
using whole dollars, as a result, margins calculated from reported
amounts may differ from those presented due to
rounding.
|
|
|
(1)
|
Refer to page 23 for
additional information on non-IFRS financial measures.
|
Non-IFRS
Financial
Measures
|
Definition
|
Why Useful to the
Company and Investors
|
Adjusted EBITDA and the
related margin
|
Represents 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 and fair value adjustments, including those
related to acquired deferred revenue.
The related margin is
adjusted EBITDA expressed as a percentage of revenues. For purposes
of this calculation, revenues are before fair value adjustments to
acquired deferred revenue.
|
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.
Also, represents a
measure commonly reported and widely used by investors as a
valuation metric, as well as to assess the company's ability to
incur and service debt.
|
Adjusted earnings and
adjusted EPS
|
Net earnings or loss
including dividends declared on preference shares but excluding the
post-tax impacts of fair value adjustments, including those related
to acquired deferred revenue, 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.
The post-tax amount of
each item is 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.
|
Provides a more
comparable basis to analyze earnings.
These measures are
commonly used by shareholders to measure performance.
|
Effective tax rate on
adjusted earnings
|
Adjusted tax expense
divided by pre-tax adjusted earnings. Adjusted tax expense is
computed as income tax (benefit) expense plus or minus the income
tax impacts of all items impacting adjusted earnings (as described
above), and other tax items impacting comparability.
In interim periods, we
also make an adjustment to reflect income taxes based on the
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.
|
Provides a basis to
analyze the effective tax rate associated with adjusted
earnings.
Because the
geographical mix of pre-tax profits and losses in interim periods
may be different from that for the full year, our effective tax
rate computed in accordance with IFRS may be more volatile by
quarter. Therefore, we believe that using the expected full-year
effective tax rate provides more comparability among interim
periods.
|
Free cash
flow
|
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.
|
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
acquisitions.
|
Changes before the
impact of foreign currency or at "constant currency"
|
The changes in
revenues, adjusted EBITDA and the related margin, and adjusted EPS
before currency (at constant currency or excluding the effects of
currency) are determined by converting the current and equivalent
prior period's local currency results using the same foreign
currency exchange rate.
|
Provides better
comparability of business trends from period to period.
|
Changes in revenues
computed on an "organic" basis
|
Represent changes in
revenues of the company's existing businesses at constant currency.
The metric excludes the distortive impacts of acquisitions and
dispositions from not owning the business in both comparable
periods.
|
Provides further
insight into the performance of the company's 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.
|
Accrued capital
expenditures as a percentage of revenues
|
Accrued capital
expenditures divided by revenues, where accrued capital
expenditures include amounts that remain unpaid at the end of the
reporting period. For purposes of this calculation, revenues are
before fair value adjustments to acquired deferred
revenue.
|
Reflects the basis on
which the company manages capital expenditures for internal
budgeting purposes.
|
"Big 3"
segments
|
The company's combined
Legal Professionals, Corporates and Tax & Accounting
Professionals segments. All measures reported for the "Big 3"
segments are non-IFRS financial measures.
|
The "Big 3" segments
comprised approximately 80% of revenues and represent the core of
the company's business information service product
offerings.
|
|
Please refer to
reconciliations for the most directly comparable IFRS financial
measures.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/thomson-reuters-reports-second-quarter-2023-results-301891408.html
SOURCE Thomson Reuters