- Total company revenue up 6% / organic revenue up 5%
- Revenue for four of five business segments grew 6% organically
- Raised full-year 2021 revenue guidance
- Total company revenue forecast increased to 4.5% - 5.0% from 4.0% - 4.5%
- "Big 3" segments revenue forecast increased to approximately 6.0% from 5.5% - 6.0%
- Raised full-year 2021 free cash flow guidance to approximately
$1.2 billion from$1.1 -$1.2 billion - Reaffirmed full-year 2022 and 2023 guidance, with minor adjustments to 2022 Change Program spend
- Change Program on track - achieved
$132 million run-rate operating expense savings throughSeptember 30 - Repurchased
$1.1 billion of company shares under$1.2 billion buyback program throughOctober 31
"The momentum we saw in the first half of the year continued into the third quarter with revenue and sales performance above our expectations and consistent across the business. This strong performance reflects how our products fit the needs of our customers, enabling them to better serve their own clients in a rapidly changing workplace. It also demonstrates our leading positions in healthy and growing markets. Based on our strong financial performance and our confidence in the trajectory of the business for the remainder of the year, we have again increased our full-year 2021 revenue guidance," said
Consolidated Financial Highlights - Three Months Ended
Three Months Ended (Millions of (unaudited) | ||||
IFRS Financial Measures(1) | 2021 | 2020 | Change | Change at |
Revenues | 6% | |||
Operating profit | -11% | |||
Diluted (loss) earnings per share (EPS) | n/m | |||
Net cash provided by operating activities | -9% | |||
Non-IFRS Financial Measures(1) | ||||
Revenues | 6% | 5% | ||
Adjusted EBITDA | -7% | -7% | ||
Adjusted EBITDA margin | 30.0% | 34.0% | -400bp | -410bp |
Adjusted EPS | 18% | 15% | ||
Free cash flow | -30% | |||
|
Revenues increased 6%, driven by growth across four of the company's five business segments and a 1% favorable impact from foreign currency.
- Organic revenues increased 5%, driven by 6% growth in recurring revenues (81% of total revenues), as well as 8% growth in transactions revenues. Global Print revenues declined.
- The company's "Big 3" segments (Legal Professionals, Corporates and Tax & Accounting Professionals), which collectively comprised 79% of total revenues, reported organic revenue growth of 6%.
Operating profit decreased 11% as the prior-year period included a significant benefit from the revaluation of warrants that the company previously held in Refinitiv, which was sold to London Stock Exchange Group (LSEG) in
- Adjusted EBITDA, which excludes the impact of the warrant revaluation among other items, declined 7% as higher revenues were more than offset by higher costs, which included costs associated with the company's Change Program. The related margin decreased to 30.0% from 34.0% primarily because costs from the Change Program negatively impacted the margin by 350bp.
Diluted loss per share of
- Adjusted EPS, which excludes the change in value of the company's LSEG investment, as well as other adjustments, increased to
$0.46 per share from$0.39 per share in the prior-year period as lower depreciation and amortization and lower income taxes offset lower adjusted EBITDA.
Net cash provided by operating activities decreased as higher revenues were more than offset by higher expenses, which included Change Program costs, and higher tax payments.
- Free cash flow decreased due to lower cash flow from operating activities and because the prior-year period included proceeds from the sale of real estate.
Highlights by Customer Segment - Three Months Ended
(Millions of (unaudited) | |||||||
Three Months Ended | |||||||
Change | |||||||
2021 | 2020 | Total | Constant |
Organic(1) | |||
Revenues | |||||||
Legal Professionals | 7% | 6% | 6% | ||||
Corporates | 356 | 333 | 7% | 6% | 6% | ||
Tax & Accounting Professionals | 175 | 165 | 6% | 6% | 6% | ||
"Big 3" Segments Combined | 1,213 | 1,134 | 7% | 6% | 6% | ||
| 164 | 154 | 6% | 6% | 6% | ||
Global Print | 149 | 154 | -3% | -5% | -5% | ||
Eliminations/Rounding | - | 1 | |||||
Revenues | 6% | 5% | 5% | ||||
Adjusted EBITDA | |||||||
Legal Professionals | 6% | 4% | |||||
Corporates | 131 | 120 | 9% | 9% | |||
Tax & Accounting Professionals | 49 | 47 | 4% | 6% | |||
"Big 3" Segments Combined | 468 | 439 | 7% | 6% | |||
| 25 | 23 | 4% | 8% | |||
Global Print | 52 | 64 | -18% | -19% | |||
Corporate costs | (87) | (35) | n/a | n/a | |||
Adjusted EBITDA | -7% | -7% | |||||
Adjusted EBITDA Margin | |||||||
Legal Professionals | 42.3% | 42.8% | -50bp | -80bp | |||
Corporates | 36.8% | 36.0% | 80bp | 80bp | |||
Tax & Accounting Professionals | 28.0% | 28.5% | -50bp | -20bp | |||
"Big 3" Segments Combined | 38.6% | 38.7% | -10bp | -20bp | |||
| 14.9% | 15.2% | -30bp | 20bp | |||
Global Print | 35.0% | 41.1% | -610bp | -630bp | |||
Corporate costs | n/a | n/a | n/a | n/a | |||
Adjusted EBITDA margin | 30.0% | 34.0% | -400bp | -410bp | |||
n/a: not applicable (1) Computed for revenue growth only. |
Unless otherwise noted, all revenue growth comparisons by customer segment in this news release are at constantcurrency (or exclude the impact of foreign currency) as Thomson Reuters believes this provides the best basis to measure their performance.
Legal Professionals
Revenues increased 6% (all organic) to
- Recurring revenues grew 6% (93% of total, all organic), primarily due to strong performances from Practical Law, Westlaw Edge,
FindLaw and the Government business as well as contributions from the company's Canadian, European and Asian & Emerging Markets businesses. - Transactions revenues grew 10% (7% of total, all organic), primarily related to Elite,
FindLaw and the Government businesses.
Adjusted EBITDA increased 6% to
- The margin decreased to 42.3% from 42.8%, primarily due to year-over-year timing of expenses such as marketing and selling costs.
Corporates
Revenues increased 6% (all organic) to
- Recurring revenues grew 7% (87% of total, all organic) driven by Practical Law, Indirect Tax and CLEAR as well as the company's businesses in
Latin America andAsia & Emerging Markets. - Transactions revenues grew 2% (13% of total, all organic).
Adjusted EBITDA increased 9% to
- The margin increased to 36.8% from 36.0%, primarily due to higher revenues.
Tax & Accounting Professionals
Revenues increased 6% (all organic) to
- Recurring revenues grew 10% (84% of total, all organic), driven by strong growth from the company's Latin American businesses and audit solutions, which includes Confirmation.
- Transactions revenues decreased 9% (16% of total, all organic), primarily due to the year-over-year timing of the
U.S. federal tax filing deadlines for individuals moving from the third quarter of 2020 to the second quarter of 2021. - Normalizing for the shift in the
U.S. federal tax filing deadline, organic revenues increased 11%.
Adjusted EBITDA increased 4% to
- The margin decreased to 28.0% from 28.5%, primarily due to the year-over-year timing of revenue related to the
U.S. federal tax filing deadline.
The Tax & Accounting Professionals segment is the company's most seasonal business with approximately 60% of full-year revenues typically generated in the first and fourth quarters. As a result, the margin performance of this segment has been generally higher in the first and fourth quarters as costs are typically incurred in a more linear fashion throughout the year.
Revenues of
- Reuters Events continues to hold nearly all events virtually and continues to assess when a return to regular in-person events can resume based on local health guidelines and feedback from customers.
Adjusted EBITDA increased 4% to
Global Print
Revenues decreased 5% to
Adjusted EBITDA decreased 18% to
- The margin decreased to 35.0% from 41.1% due to decreased revenues and the dilutive impact of lower margin third-party print revenue.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
Consolidated Financial Highlights - Nine Months Ended
Nine Months Ended (Millions of (unaudited)
| ||||
IFRS Financial Measures(1) | 2021 | 2020 | Change | Change at |
Revenues | 6% | |||
Operating profit | 1% | |||
Diluted earnings per share (EPS) | n/m | |||
Net cash provided by operating activities | 17% | |||
Non-IFRS Financial Measures(1) | ||||
Revenues | 6% | 5% | ||
Adjusted EBITDA | 5% | 4% | ||
Adjusted EBITDA margin | 32.7% | 33.2% | -50bp | -30bp |
Adjusted EPS | 16% | 15% | ||
Free cash flow | 13% | |||
n/m: not meaningful |
Revenues increased 6% related to growth in recurring and transactions revenues and a 1% favorable impact from foreign currency.
- Organic revenues increased 5% primarily due to 5% growth in recurring revenues (79% of total revenues) as well as growth in transactions revenues. Global Print revenues declined.
- The company's "Big 3" segments, which collectively comprised 80% of total revenues, reported organic revenue growth of 6%.
Operating profit increased 1% as higher revenues helped to offset higher costs, which included costs associated with the company's Change Program, as well as a benefit associated with the revaluation of the Refinitiv warrants in the prior-year period.
- Adjusted EBITDA which excludes the impact of the warrant revaluation among other items, increased 5% as higher revenues more than offset higher costs. The related margin decreased to 32.7% from 33.2% in the prior-year period. Adjusted EBITDA margin was negatively impacted by 230bp due to Change Program costs.
Diluted EPS increased to
- Adjusted EPS, which excludes the gain on the sale of Refinitiv, as well as other adjustments, increased to
$1.52 per share from$1.31 per share in the prior-year period, primarily due to higher adjusted EBITDA and lower income tax expense.
Net cash provided by operating activities increased as higher revenues and favorable movements in working capital (including lower annual incentive bonus payments, which were due to the impact of COVID-19 in 2020) more than offset higher tax payments and expenses, which included Change Program costs.
- Free cash flow increased as higher cash flows from operating activities more than offset a prior-year period benefit from the proceeds associated with the sale of real estate.
Highlights by Customer Segment - Nine Months Ended
(Millions of | |||||||
Nine Months Ended | |||||||
Change | |||||||
2021 | 2020 | Total | Constant |
Organic(1) | |||
Revenues | |||||||
Legal Professionals | 7% | 6% | 6% | ||||
Corporates | 1,088 | 1,029 | 6% | 5% | 5% | ||
Tax & Accounting Professionals | 597 | 551 | 8% | 8% | 8% | ||
"Big 3" Segments Combined | 3,708 | 3,462 | 7% | 6% | 6% | ||
| 492 | 464 | 6% | 5% | 5% | ||
Global Print | 439 | 443 | -1% | -3% | -3% | ||
Eliminations/Rounding | (1) | (1) | |||||
Revenues | 6% | 5% | 5% | ||||
Adjusted EBITDA | |||||||
Legal Professionals | 13% | 11% | |||||
Corporates | 407 | 355 | 15% | 14% | |||
Tax & Accounting Professionals | 219 | 185 | 18% | 18% | |||
"Big 3" Segments Combined | 1,478 | 1,296 | 14% | 13% | |||
| 88 | 67 | 30% | 44% | |||
Global Print | 165 | 181 | -9% | -11% | |||
Corporate costs | (213) | (94) | n/a | n/a | |||
Adjusted EBITDA | 5% | 4% | |||||
Adjusted EBITDA Margin | |||||||
Legal Professionals | 42.1% | 40.2% | 190bp | 180bp | |||
Corporates | 37.4% | 34.5% | 290bp | 310bp | |||
Tax & Accounting Professionals | 36.6% | 33.6% | 300bp | 310bp | |||
"Big 3" Segments Combined | 39.9% | 37.4% | 250bp | 230bp | |||
| 17.8% | 14.5% | 330bp | 540bp | |||
Global Print | 37.5% | 40.7% | -320bp | -340bp | |||
Corporate costs | n/a | n/a | n/a | n/a | |||
Adjusted EBITDA margin | 32.7% | 33.2% | -50bp | -30bp | |||
n/a: not applicable (1) Computed for revenue growth only. |
Thomson Reuters Change Program and Outlook
In
The company's three-year outlook incorporates the forecasted impacts associated with the Change Program, assumes constant currency rates, and excludes the impact of any future acquisitions or dispositions that may occur during those periods. Thomson Reuters believes that this type of guidance provides useful insight into the performance of its businesses.
While the company's third-quarter 2021 performance provides it with increasing confidence about its outlook, the global economy continues to experience substantial disruption due to concerns regarding resurgences and new strains of COVID-19, as well as from the measures intended to mitigate its impact. Any worsening of the global economic or business environment could impact the company's ability to achieve its outlook.
Today, the company reaffirmed and increased part of its full-year outlook for 2021, which is reflected in the table below. The company also reaffirmed its full-year outlook for 2022 and 2023, except for a minor increase to 2022 Change Program spend, reflecting the carryover of the lower than expected spend in 2021.
Update to Full-Year 2021 Outlook
Total Thomson Reuters | Original FY 2021 Outlook ( | FY 2021 Outlook Update ( | FY 2021 Outlook Update ( | FY 2021 Outlook Update ( |
Total Revenue Growth | 3.0% - 4.0% | 3.5% - 4.0% | 4.0% - 4.5% | 4.5% - 5.0% |
Organic Revenue Growth | 3.0% - 4.0% | 3.5% - 4.0% | 4.0% - 4.5% | 4.5% - 5.0% |
Adjusted EBITDA Margin | 30% - 31% | Unchanged | 31% - 32% | Unchanged |
Corporate Costs Core Corporate Costs Change Program Operating Expenses | Unchanged | Unchanged | Unchanged | |
Free Cash Flow | Unchanged | ~ | ||
Capital Expenditures - % of Revenue Change Program Capital Expenditures | 9.0% - 9.5% | Unchanged | Unchanged | Unchanged |
Depreciation & Amortization of | Unchanged | Unchanged | Unchanged | |
Interest Expense (P&L) | Unchanged | Unchanged | Unchanged | |
Effective Tax Rate on Adjusted Earnings | 16% - 18% | Unchanged | Unchanged | 14% - 16% |
Big 3 Segments (Legal Professionals, Corporates and | Original FY 2021 Outlook ( | FY 2021 Outlook Update ( | FY 2021 Outlook Update ( | FY 2021 Outlook Update ( |
Total Revenue Growth | 4.5% - 5.5% | 5.0% - 5.5% | 5.5% - 6.0% | ~ 6.0% |
Organic Revenue Growth | 4.5% - 5.5% | 5.0% - 5.5% | 5.5% - 6.0% | ~ 6.0% |
Adjusted EBITDA Margin | 38% - 39% | Unchanged | ~ 39% | Unchanged |
The information in this section is forward-looking. Actual results, which include the impact of currency and future acquisitions and dispositions completed during 2021, 2022 and 2023, may differ materially from the company's outlook. Some of the forward-looking financial measures in the outlook above are provided on a non-IFRS basis. See the section below entitled "Non-IFRS Financial Measures" for more information. The information in this section should also be read in conjunction with the section below entitled "Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions."
Share Repurchases - Update on
In
From
Dividends
In
London Stock Exchange Group (LSEG) Ownership Interest
In
As of
In
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
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
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS
Certain statements in this news release, including, but not limited to, statements in
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
The company's business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments (including those related to the COVID-19 pandemic), as well as other factors that the company believes are appropriate under the circumstances. Material assumptions and material risks may cause actual performance to differ from the company's expectations underlying its business outlook, which reflects the global economic crisis caused by the COVID-19 pandemic. For a discussion of material assumptions and material risks related to the company's outlook, please see pages 22-23 of the company's second-quarter management's discussion and analysis (MD&A) for the period ended
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 Head of +1 437 388 3619 melissa.cassar@tr.com |
INVESTORS Head of Investor Relations +1 332 219 1111 frank.golden@tr.com |
Thomson Reuters will webcast a discussion of its third-quarter 2021 results and its business outlook today beginning at
2021 - 2023 Outlook
Total Thomson Reuters | 2021 Outlook Updated | 2022 Outlook Reaffirmed | 2023 Outlook Reaffirmed |
Total Revenue Growth | 4.5% - 5.0% | 4.0% - 5.0% | 5.0% - 6.0% |
Organic Revenue Growth | 4.5% - 5.0% | 4.0% - 5.0% | 5.0% - 6.0% |
Adjusted EBITDA Margin | 31% - 32% | 34% - 35% | 38% – 40% |
Corporate Costs Core Corporate Costs Change Program Operating Expenses | |||
Free Cash Flow | ~ | ||
Capital Expenditures - % of Revenue Change Program Capital Expenditures | 9.0% - 9.5% | 7.5% - 8.0% | 6.0% - 6.5% |
Depreciation & Amortization of | |||
Interest Expense (P&L) | |||
Effective Tax Rate on Adjusted Earnings | 14% - 16% | n/a | n/a |
Big 3 Segments (Legal Professionals, Corporates and | 2021 Outlook Updated | 2022 Outlook Reaffirmed | 2023 Outlook Reaffirmed |
Total Revenue Growth | ~ 6.0% | 5.5% - 6.5% | 6.0% - 7.0% |
Organic Revenue Growth | ~ 6.0% | 5.5% - 6.5% | 6.0% - 7.0% |
Adjusted EBITDA Margin | ~ 39% | 41% - 42% | 43% - 45% |
The information in this section is forward-looking. Actual results, which include the impact of currency and future acquisitions and dispositions completed during 2021, 2022 and 2023, may differ materially from the company's outlook. Some of the forward-looking financial measures in the outlook above are provided on a non-IFRS basis. See the section above entitled "Non-IFRS Financial Measures" for more information. The information in this section should also be read in conjunction with the section above entitled "Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions."
Consolidated Income Statement | ||||||
(millions of | ||||||
(unaudited) | ||||||
Three Months Ended | Nine Months Ended | |||||
2021 | 2020 | 2021 | 2020 | |||
CONTINUING OPERATIONS | ||||||
Revenues | ||||||
Operating expenses | (1,060) | (955) | (3,114) | (2,901) | ||
Depreciation | (40) | (61) | (128) | (144) | ||
Amortization of computer software | (119) | (133) | (356) | (362) | ||
Amortization of other identifiable intangible assets | (29) | (32) | (90) | (92) | ||
Other operating gains, net | 4 | 56 | 35 | 104 | ||
Operating profit | 282 | 318 | 985 | 973 | ||
Finance costs, net: | ||||||
Net interest expense | (46) | (49) | (146) | (146) | ||
Other finance income | 34 | 2 | 30 | 36 | ||
Income before tax and equity method investments | 270 | 271 | 869 | 863 | ||
Share of post-tax (losses) earnings in equity method investments | (672) | (178) | 6,717 | (385) | ||
Tax benefit (expense) | 161 | 147 | (1,722) | 84 | ||
(Loss) earnings from continuing operations | (241) | 240 | 5,864 | 562 | ||
Earnings (loss) from discontinued operations, net of tax | 1 | 1 | - | (2) | ||
Net (loss) earnings | ||||||
(Loss) earnings attributable to common shareholders | ||||||
Earnings (loss) per share: | ||||||
Basic (loss) earnings per share: | ||||||
From continuing operations | ||||||
From discontinued operations | - | - | - | (0.01) | ||
Basic (loss) earnings per share | ||||||
Diluted (loss) earnings per share: | ||||||
From continuing operations | ||||||
From discontinued operations | - | - | - | - | ||
Diluted (loss) earnings per share | ||||||
Basic weighted-average common shares | 494,624,854 | 497,090,942 | 495,515,310 | 496,544,202 | ||
Diluted weighted-average common shares | 494,624,854 | 498,433,719 | 496,593,404 | 497,828,059 |
Consolidated Statement of Financial Position | |||
(millions of | |||
(unaudited) | |||
2021 | 2020 | ||
Assets | |||
Cash and cash equivalents | |||
Trade and other receivables | 951 | 1,151 | |
Other financial assets | 83 | 612 | |
Prepaid expenses and other current assets | 463 | 425 | |
Current assets | 3,008 | 3,975 | |
Property and equipment, net | 473 | 545 | |
Computer software, net | 808 | 830 | |
Other identifiable intangible assets, net | 3,359 | 3,427 | |
5,935 | 5,976 | ||
Equity method investments | 7,225 | 1,136 | |
Other non-current assets | 1,148 | 788 | |
Deferred tax | 1,143 | 1,204 | |
Total assets | |||
Liabilities and equity | |||
Liabilities | |||
Payables, accruals and provisions | |||
Current tax liabilities | 398 | 251 | |
Deferred revenue | 838 | 866 | |
Other financial liabilities | 649 | 376 | |
Current liabilities | 3,111 | 2,652 | |
Long-term indebtedness | 3,782 | 3,772 | |
Provisions and other non-current liabilities | 971 | 1,083 | |
Deferred tax | 1,044 | 394 | |
Total liabilities | 8,908 | 7,901 | |
Equity | |||
Capital | 5,463 | 5,458 | |
Retained earnings | 9,550 | 5,211 | |
Accumulated other comprehensive loss | (822) | (689) | |
Total equity | 14,191 | 9,980 | |
Total liabilities and equity |
Consolidated Statement of Cash Flow | |||||
(millions of | |||||
(unaudited) | |||||
Three Months Ended | Nine Months Ended | ||||
2021 | 2020 | 2021 | 2020 | ||
Cash provided by (used in): | |||||
Operating activities | |||||
(Loss) earnings from continuing operations | |||||
Adjustments for: | |||||
Depreciation | 40 | 61 | 128 | 144 | |
Amortization of computer software | 119 | 133 | 356 | 362 | |
Amortization of other identifiable intangible assets | 29 | 32 | 90 | 92 | |
Share of post-tax losses (earnings) in equity method investments | 672 | 178 | (6,717) | 385 | |
Deferred tax | (153) | (153) | 770 | (190) | |
Other | (7) | (10) | 56 | (16) | |
Changes in working capital and other items | 101 | 103 | 901 | (147) | |
Operating cash flows from continuing operations | 560 | 584 | 1,448 | 1,192 | |
Operating cash flows from discontinued operations | (26) | (3) | (72) | (13) | |
Net cash provided by operating activities | 534 | 581 | 1,376 | 1,179 | |
Investing activities | |||||
Acquisitions, net of cash acquired | (2) | (43) | (5) | (165) | |
Proceeds from disposals of businesses and investments | 13 | - | 28 | 1 | |
Dividend from sale of LSEG shares | - | - | 994 | - | |
Capital expenditures | (131) | (117) | (364) | (404) | |
Proceeds from disposals of property and equipment | - | 98 | - | 162 | |
Other investing activities | 3 | - | 56 | 2 | |
Taxes paid on sale of Refinitiv and LSEG shares | (218) | - | (662) | - | |
Investing cash flows from continuing operations | (335) | (62) | 47 | (404) | |
Investing cash flows from discontinued operations | (210) | - | (252) | - | |
Net cash used in investing activities | (545) | (62) | (205) | (404) | |
Financing activities | |||||
Proceeds from debt | - | - | - | 2,019 | |
Repayments of debt | - | - | - | (1,645) | |
Net borrowings under short-term loan facilities | - | (120) | - | (2) | |
Payments of lease principal | (22) | (20) | (65) | (56) | |
Repurchases of common shares | (603) | - | (803) | (200) | |
Dividends paid on preference shares | (1) | (1) | (2) | (2) | |
Dividends paid on common shares | (194) | (183) | (582) | (547) | |
Other financing activities | 3 | 6 | 8 | (10) | |
Net cash used in financing activities | (817) | (318) | (1,444) | (443) | |
(Decrease) increase in cash and bank overdrafts | (828) | 201 | (273) | 332 | |
Translation adjustments | (3) | 5 | (3) | (5) | |
Cash and bank overdrafts at beginning of period | 2,342 | 946 | 1,787 | 825 | |
Cash and bank overdrafts at end of period | |||||
Cash and bank overdrafts at end of period comprised of: | |||||
Cash and cash equivalents |
Reconciliation of (Loss) Earnings from Continuing Operations to Adjusted EBITDA(1) | |||||||
(millions of | |||||||
(unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2021 | 2020 | 2021 | 2020 | ||||
(Loss) earnings from continuing operations |
|
|
| ||||
Adjustments to remove: | |||||||
Tax (benefit) expense | (161) | (147) | 1,722 | (84) | |||
Other finance income | (34) | (2) | (30) | (36) | |||
Net interest expense | 46 | 49 | 146 | 146 | |||
Amortization of other identifiable intangible assets | 29 | 32 | 90 | 92 | |||
Amortization of computer software | 119 | 133 | 356 | 362 | |||
Depreciation | 40 | 61 | 128 | 144 | |||
EBITDA | |||||||
Adjustments to remove: | |||||||
Share of post-tax losses (earnings) in equity method investments | 672 | 178 | (6,717) | 385 | |||
Other operating gains, net | (4) | (56) | (35) | (104) | |||
Fair value adjustments(4) | (8) | 3 | (6) | (17) | |||
Adjusted EBITDA(1) | |||||||
Adjusted EBITDA margin(1) | 30.0% | 34.0% | 32.7% | 33.2% |
Reconciliation of Net (Loss) Earnings to Adjusted Earnings(2) | |||||||
Reconciliation of Total Change in Adjusted EPS(2) to Change in Constant Currency(5) | |||||||
(millions of | |||||||
(unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2021 | 2020 | Change | 2021 | 2020 | Change | ||
Net (loss) earnings | |||||||
Adjustments to remove: | |||||||
Fair value adjustments (4) | (8) | 3 | (6) | (17) | |||
Amortization of other identifiable intangible assets | 29 | 32 | 90 | 92 | |||
Other operating gains, net | (4) | (56) | (35) | (104) | |||
Other finance income | (34) | (2) | (30) | (36) | |||
Share of post-tax losses (earnings) in equity method investments | 672 | 178 | (6,717) | 385 | |||
Tax on above items | (174) | (41) | 1,616 | (100) | |||
Tax items impacting comparability | (4) | (146) | (15) | (107) | |||
(Earnings) loss from discontinued operations, net of tax | (1) | (1) | - | 2 | |||
Interim period effective tax rate normalization(3) | (8) | (15) | (10) | (21) | |||
Dividends declared on preference shares | (1) | (1) | (2) | (2) | |||
Adjusted earnings(2) | |||||||
Adjusted EPS (2) | 18% | 16% | |||||
Foreign currency(5) | 3% | 1% | |||||
Constant currency(5) | 15% | 15% | |||||
Diluted weighted-average common shares (millions)(2) | 495.9 | 498.4 | 496.6 | 497.8 |
Refer to page 23 for footnotes.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow(6) | ||||||
(millions of | ||||||
(unaudited) | ||||||
Three Months Ended | Nine Months Ended | |||||
2021 | 2020 | 2021 | 2020 | |||
Net cash provided by operating activities | ||||||
Capital expenditures | (131) | (117) | (364) | (404) | ||
Proceeds from disposals of property and equipment | - | 98 | - | 162 | ||
Other investing activities | 3 | - | 56 | 2 | ||
Payments of lease principal | (22) | (20) | (65) | (56) | ||
Dividends paid on preference shares | (1) | (1) | (2) | (2) | ||
Free cash flow (6) | ||||||
Reconciliation of Net Debt and Leverage Ratio of Net Debt to Adjusted EBITDA(8) | ||
(millions of | ||
(unaudited) | ||
2021 | ||
Long-term indebtedness | ||
Total debt | 3,782 | |
Swaps | (97) | |
Total debt after swaps | 3,685 | |
Remove fair value adjustments for hedges | (9) | |
Total debt after currency arrangements | 3,676 | |
Remove transaction costs, premiums or discounts included in the carrying value of debt | 35 | |
Add: lease liabilities (current and non-current) | 268 | |
Less: cash and cash equivalents | (1,511) | |
Net debt (8) | ||
Adjusted EBITDA(1)* | ||
Net Debt / Adjusted EBITDA(8)* | 1.2:1 |
* The company's target leverage ratio of 2.5:1 is a non-IFRS measure. For purposes of this calculation, adjusted EBITDA is computed on a rolling 12-month basis and includes adjusted EBITDA of
Refer to page 23 for footnotes.
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency(5) and Organic Basis(7) | ||||||||||
(millions of | ||||||||||
(unaudited) | ||||||||||
Three Months Ended | ||||||||||
Change | ||||||||||
2021 | 2020 | Total |
Foreign | SUBTOTAL |
Acquisitions/ |
Organic(7) | ||||
Total Revenues | ||||||||||
Legal Professionals | 7% | 1% | 6% | 0% | 6% | |||||
Corporates | 356 | 333 | 7% | 1% | 6% | 0% | 6% | |||
Tax & Accounting Professionals | 175 | 165 | 6% | 0% | 6% | 0% | 6% | |||
"Big 3" Segments Combined | 1,213 | 1,134 | 7% | 1% | 6% | 0% | 6% | |||
| 164 | 154 | 6% | 0% | 6% | 0% | 6% | |||
Global Print | 149 | 154 | -3% | 1% | -5% | 0% | -5% | |||
Eliminations/Rounding | - | 1 | ||||||||
Revenues | 6% | 1% | 5% | 0% | 5% | |||||
Recurring Revenues | ||||||||||
Legal Professionals | 7% | 1% | 6% | 0% | 6% | |||||
Corporates | 309 | 287 | 8% | 1% | 7% | 0% | 7% | |||
Tax & Accounting Professionals | 147 | 133 | 10% | 0% | 10% | 0% | 10% | |||
"Big 3" Segments Combined | 1,090 | 1,012 | 8% | 1% | 7% | 0% | 7% | |||
| 143 | 141 | 1% | 0% | 1% | 0% | 1% | |||
Total Recurring Revenues | 7% | 1% | 6% | 0% | 6% | |||||
Transactions Revenues | ||||||||||
Legal Professionals | 11% | 1% | 10% | -1% | 10% | |||||
Corporates | 47 | 46 | 2% | 0% | 2% | 0% | 2% | |||
Tax & Accounting Professionals | 28 | 32 | -9% | 0% | -9% | 0% | -9% | |||
"Big 3" Segments Combined | 123 | 122 | 2% | 1% | 2% | 0% | 2% | |||
| 21 | 13 | 62% | -5% | 66% | 0% | 66% | |||
Total Transactions Revenues | 8% | 0% | 8% | 0% | 8% | |||||
Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
Refer to page 23 for footnotes.
| |||||||||||||||||||||
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency(5) and Organic Basis(7) | |||||||||||||||||||||
(millions of | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
Change | |||||||||||||||||||||
2021 | 2020 | Total |
Foreign | SUBTOTAL |
Acquisitions/ |
Organic(7) | |||||||||||||||
Total Revenues | |||||||||||||||||||||
Legal Professionals | 7% | 1% | 6% | 0% | 6% | ||||||||||||||||
Corporates | 1,088 | 1,029 | 6% | 1% | 5% | 0% | 5% | ||||||||||||||
Tax & Accounting Professionals | 597 | 551 | 8% | 0% | 8% | 0% | 8% | ||||||||||||||
"Big 3" Segments Combined | 3,708 | 3,462 | 7% | 1% | 6% | 0% | 6% | ||||||||||||||
| 492 | 464 | 6% | 1% | 5% | 0% | 5% | ||||||||||||||
Global Print | 439 | 443 | -1% | 2% | -3% | 0% | -3% | ||||||||||||||
Eliminations/Rounding | (1) | (1) | |||||||||||||||||||
Revenues | 6% | 1% | 5% | 0% | 5% | ||||||||||||||||
Recurring Revenues | |||||||||||||||||||||
Legal Professionals | 7% | 1% | 6% | 0% | 5% | ||||||||||||||||
Corporates | 904 | 850 | 6% | 1% | 5% | 0% | 5% | ||||||||||||||
Tax & Accounting Professionals | 457 | 427 | 7% | 0% | 7% | 0% | 7% | ||||||||||||||
"Big 3" Segments Combined | 3,242 | 3,036 | 7% | 1% | 6% | 0% | 6% | ||||||||||||||
| 431 | 424 | 2% | 1% | 0% | 0% | 0% | ||||||||||||||
Total Recurring Revenues | 6% | 1% | 5% | 0% | 5% | ||||||||||||||||
Transactions Revenues | |||||||||||||||||||||
Legal Professionals | 16% | 3% | 14% | 0% | 14% | ||||||||||||||||
Corporates | 184 | 179 | 3% | 0% | 3% | 0% | 3% | ||||||||||||||
Tax & Accounting Professionals | 140 | 124 | 13% | 1% | 12% | 0% | 12% | ||||||||||||||
"Big 3" Segments Combined | 466 | 426 | 10% | 1% | 9% | 0% | 9% | ||||||||||||||
| 61 | 40 | 52% | 2% | 50% | 1% | 50% | ||||||||||||||
Total Transactions Revenues | 13% | 1% | 12% | 0% | 12% | ||||||||||||||||
Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
Refer to page 23 for footnotes.
Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant Currency Basis(5) | ||||||||||||||||
(millions of | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
Change | ||||||||||||||||
2021 | 2020 | Total | Foreign Currency | Constant Currency(5) | ||||||||||||
Adjusted EBITDA | ||||||||||||||||
Legal Professionals | 6% | 2% | 4% | |||||||||||||
Corporates | 131 | 120 | 9% | 1% | 9% | |||||||||||
Tax & Accounting Professionals | 49 | 47 | 4% | -1% | 6% | |||||||||||
"Big 3" Segments Combined | 468 | 439 | 7% | 1% | 6% | |||||||||||
| 25 | 23 | 4% | -4% | 8% | |||||||||||
Global Print | 52 | 64 | -18% | 1% | -19% | |||||||||||
Corporate costs | (87) | (35) | n/a | n/a | n/a | |||||||||||
Adjusted EBITDA | -7% | 1% | -7% | |||||||||||||
Adjusted EBITDA Margin | ||||||||||||||||
Legal Professionals | 42.3% | 42.8% | -50bp | 30bp | -80bp | |||||||||||
Corporates | 36.8% | 36.0% | 80bp | 0bp | 80bp | |||||||||||
Tax & Accounting Professionals | 28.0% | 28.5% | -50bp | -30bp | -20bp | |||||||||||
"Big 3" Segments Combined | 38.6% | 38.7% | -10bp | 10bp | -20bp | |||||||||||
| 14.9% | 15.2% | -30bp | -50bp | 20bp | |||||||||||
Global Print | 35.0% | 41.1% | -610bp | 20bp | -630bp | |||||||||||
Corporate costs | n/a | n/a | n/a | n/a | n/a | |||||||||||
Adjusted EBITDA margin | 30.0% | 34.0% | -400bp | 10bp | -410bp | |||||||||||
n/a: not applicable
Growth percentages and margins are computed using whole dollars. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
Refer to page 23 for footnotes.
Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant Currency Basis(5) | ||||||||||||||||
(millions of | ||||||||||||||||
(unaudited) | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
Change | ||||||||||||||||
2021 | 2020 | Total | Foreign Currency | Constant Currency(5) | ||||||||||||
Adjusted EBITDA | ||||||||||||||||
Legal Professionals | 13% | 2% | 11% | |||||||||||||
Corporates | 407 | 355 | 15% | 1% | 14% | |||||||||||
Tax & Accounting Professionals | 219 | 185 | 18% | 0% | 18% | |||||||||||
"Big 3" Segments Combined | 1,478 | 1,296 | 14% | 1% | 13% | |||||||||||
| 88 | 67 | 30% | -14% | 44% | |||||||||||
Global Print | 165 | 181 | -9% | 2% | -11% | |||||||||||
Corporate costs | (213) | (94) | n/a | n/a | n/a | |||||||||||
Adjusted EBITDA | 5% | 1% | 4% | |||||||||||||
Adjusted EBITDA Margin | ||||||||||||||||
Legal Professionals | 42.1% | 40.2% | 190bp | 10bp | 180bp | |||||||||||
Corporates | 37.4% | 34.5% | 290bp | -20bp | 310bp | |||||||||||
Tax & Accounting Professionals | 36.6% | 33.6% | 300bp | -10bp | 310bp | |||||||||||
"Big 3" Segments Combined | 39.9% | 37.4% | 250bp | 20bp | 230bp | |||||||||||
| 17.8% | 14.5% | 330bp | -210bp | 540bp | |||||||||||
Global Print | 37.5% | 40.7% | -320bp | 20bp | -340bp | |||||||||||
Corporate costs | n/a | n/a | n/a | n/a | n/a | |||||||||||
Adjusted EBITDA margin | 32.7% | 33.2% | -50bp | -20bp | -30bp | |||||||||||
n/a: not applicable
Growth percentages and margins are computed using whole dollars. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
Refer to page 23 for footnotes.
Footnotes
(1) | Thomson Reuters defines adjusted EBITDA for its business segments as earnings or losses from continuing operations before tax expense or benefit, net interest expense, other finance costs or income, depreciation, amortization of software and other identifiable intangible assets, Thomson Reuters share of post-tax earnings or losses in equity method investments, other operating gains and losses, certain asset impairment charges, fair value adjustments and corporate related items. Consolidated adjusted EBITDA is comprised of adjusted EBITDA for its business segments and corporate costs. Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage of revenues. Thomson Reuters uses adjusted EBITDA because it provides a consistent basis to evaluate operating profitability and performance trends by excluding items that the company does not consider to be controllable activities for this purpose. Adjusted EBITDA also represents a measure commonly reported and widely used by investors as a valuation metric. Additionally, this measure is used by Thomson Reuters and investors to assess a company's ability to incur and service debt. |
(2) | Thomson Reuters defines adjusted earnings as net earnings or loss including dividends declared on preference shares but excluding the post-tax impacts of fair value adjustments, amortization of other identifiable intangible assets, other operating gains and losses, certain asset impairment charges, other finance costs or income, Thomson Reuters share of post-tax earnings or losses in equity method investments, discontinued operations and other items affecting comparability. Thomson Reuters calculates the post-tax amount of each item excluded from adjusted earnings based on the specific tax rules and tax rates associated with the nature and jurisdiction of each item. Adjusted EPS is calculated from adjusted earnings using diluted weighted-average shares and does not represent actual earnings or loss per share attributable to shareholders. Thomson Reuters uses adjusted earnings and adjusted EPS as they provide a more comparable basis to analyze earnings and they are also measures commonly used by shareholders to measure the company's performance. |
Because Thomson Reuters reported a net loss for continuing operations under IFRS for the three months ended | |
The following table reconciles IFRS and non-IFRS common share information: |
(weighted-average common shares) | Three Months Ended | |
IFRS: Basic and Diluted | 494,624,854 | |
Effect of stock options and other equity incentive awards | 1,275,150 | |
Non-IFRS Diluted | 495,900,004 |
(3) | Adjustment to reflect income taxes based on estimated full-year effective tax rate. Earnings or losses for interim periods under IFRS reflect income taxes based on the estimated effective tax rates of each of the jurisdictions in which Thomson Reuters operates. The non-IFRS adjustment reallocates estimated full-year income taxes between interim periods but has no effect on full-year income taxes. |
(4) | Fair value adjustments primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business. |
(5) | The changes in revenues, adjusted EBITDA and the related margins, and adjusted earnings per share before currency (at constant currency or excluding the effects of currency) are determined by converting the current and prior-year period's local currency equivalent using the same exchange rates. |
(6) | Free cash flow is net cash provided by operating activities, proceeds from disposals of property and equipment, and other investing activities less capital expenditures, payments of lease principal and dividends paid on the company's preference shares. Thomson Reuters uses free cash flow as it helps assess the company's ability, over the long term, to create value for its shareholders as it represents cash available to repay debt, pay common dividends and fund share repurchases and new acquisitions. |
(7) | Represents changes in revenues of our existing businesses at constant currency. The metric excludes the distortive impacts of acquisitions and dispositions from not owning the business in both comparable periods. Thomson Reuters uses organic growth because it provides further insight into the performance of its existing businesses by excluding distortive impacts and serves as a better measure of the company's ability to grow its business over the long term. |
(8) | Net debt is total indebtedness (excluding the associated unamortized transaction costs and premiums or discounts) plus the currency related fair value of associated hedging instruments, and lease liabilities less cash and cash equivalents. For purposes of calculating the leverage ratio, net debt is divided by adjusted EBITDA for the previous twelve-month period ending with the current fiscal quarter. |
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SOURCE Thomson Reuters
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