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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Thomson Reuters Corp | LSE:0Q89 | London | Ordinary Share | CA8849038085 | THOMSON REUTERS ORD SHS |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 99.8142 | 91.91 | 100.54 | 38 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Miscellaneous Publishing | 6.79B | 2.7B | 5.8086 | 29.05 | 78.29B |
TIDM0Q89 Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results TORONTO, Feb. 8, 2022 /PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today reported results for the fourth quarter and full year ended December 31, 2021: * Strong revenue and sales growth for the fourth quarter and full year + Full-year total company revenue up 6% / organic revenue up 5% + Fourth-quarter total company revenue up 6% / organic revenue up 6% o Organic revenue up 7% for the "Big 3" (Legal Professionals, Corporates, and Tax & Accounting Professionals) * Global Legal, Tax, Risk, Fraud & Compliance markets continue to be robust, providing a tailwind * Raised 2022/2023 guidance for organic revenue growth, adjusted EBITDA margin and free cash flow * Change Program on track - $217 million run-rate operating expense savings at year-end * Increased annualized dividend per share by 10% (29th consecutive annual increase/largest increase since 2008) "The momentum we saw in the first nine months of the year continued in the fourth quarter. Revenue and sales growth were again strong and exceeded our expectations, enabling us to finish the year on a solid footing. Our performance has increased momentum moving into 2022, helping to build confidence as we work to achieve our higher 2022 and 2023 targets," said Steve Hasker, President and CEO of Thomson Reuters. Mr. Hasker added, "Our professional markets continue to grow helped by a significant global shift by customers to upgrade Legal, Tax and Risk, Fraud and Compliance products. Our products are proving well suited to enable them to effectively serve their clients. We are targeting investment in products that are driving faster growth and where we have strong positions in growing markets, and we continue to look to supplement organic growth with targeted acquisitions that can bolster our positions and where we are an advantaged owner. We look forward to continued progress in 2022 as we work to further strengthen our positions across our businesses." Consolidated Financial Highlights - Three Months Ended December 31 Three Months Ended December 31, (Millions of U.S. dollars, except for adjusted EBITDA margin and EPS) (unaudited) IFRS Financial Measures(1) 2021 2020 Change Change at Constant Currency Revenues $1,710 $1,616 6% Operating profit $257 $956 -73% Diluted (loss) earnings per share (EPS) $(0.36) $1.13 n/m Net cash provided by operating activities $397 $566 -30% Non-IFRS Financial Measures(1) Revenues $1,710 $1,616 6% 6% Adjusted EBITDA $452 $525 -14% -14% Adjusted EBITDA margin 26.4% 32.5% -610bp -610bp Adjusted EPS $0.43 $0.54 -20% -20% Free cash flow $255 $449 -43% (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 "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 6%, before and after the impact of foreign currency, driven by growth across four of the company's five business segments. * Organic revenues increased 6%, driven by 6% growth in recurring revenues (80% of total revenues), as well as 16% growth in transactions revenues. Global Print revenues declined 4%. * The company's "Big 3" segments (Legal Professionals, Corporates and Tax & Accounting Professionals) reported organic revenue growth of 7% and collectively comprised 79% of total revenues. Operating profit decreased 73%, primarily because the prior year included significant gains from the sale of an investment and an amendment to a pension plan. Additionally, higher revenues were more than offset by higher costs, primarily related to investments associated with the company's Change Program and higher performance bonus expense. Information regarding the Change Program is provided later in this news release. Fourth-quarter costs also included a $25 million investment to better position the business for 2022, which was allocated to go-to-market and product development initiatives, and data and analytics tools to improve the customer experience. * Adjusted EBITDA, which excludes the gains from the sale of the investment and the pension plan amendment among other items, declined 14% as higher revenues were more than offset by higher costs. The related margin decreased to 26.4% from 32.5% primarily due to higher costs, including those associated with the Change Program, which negatively impacted the margin by 470bp. Diluted loss per share was $0.36 compared to diluted earnings per share of $1.13 in the prior-year period due to lower operating profit and a decrease in value of the company's LSEG investment, which is discussed in more detail in the "London Stock Exchange Group (LSEG) Ownership Interest" section of this news release. * Adjusted EPS, which excludes the change in value of the company's LSEG investment, as well as other adjustments, decreased to $0.43 per share from $0.54 per share in the prior-year period primarily due to lower adjusted EBITDA. Adjusted EPS was $0.04 lower due to the $25 million of additional investment previously noted. Net cash provided by operating activities decreased as higher revenues were more than offset by higher expenses, which included Change Program costs, and unfavorable movements in working capital. * Free cash flow decreased $194 million due to lower cash flow from operating activities. Highlights by Customer Segment - Three Months Ended December 31 (Millions of U.S. dollars, except for adjusted EBITDA margins) (unaudited) Three Months Change Ended December 31, 2021 2020 Total Constant Organic(1) Currency (2) (1) Revenues Legal Professionals $689 $653 5% 5% 6% Corporates 361 338 7% 7% 7% Tax & Accounting 309 285 9% 9% 9% Professionals "Big 3" Segments Combined(1) 1,359 1,276 6% 7% 7% Reuters News 182 164 11% 12% 12% Global Print 170 177 -4% -4% -4% Eliminations/Rounding (1) (1) Revenues $1,710 $1,616 6% 6% 6% Adjusted EBITDA(1) Legal Professionals $239 $245 -3% -2% Corporates 95 105 -10% -10% Tax & Accounting 154 145 6% 7% Professionals "Big 3" Segments Combined(1) 488 495 -2% -1% Reuters News 15 6 139% 107% Global Print 61 61 0% -1% Corporate costs (112) (37) n/a n/a Adjusted EBITDA $452 $525 -14% -14% Adjusted EBITDA Margin(1) Legal Professionals 34.5% 37.5% -300bp -270bp Corporates 26.3% 31.1% -480bp -480bp Tax & Accounting 49.8% 51.1% -130bp -120bp Professionals "Big 3" Segments Combined(1) 35.8% 38.8% -300bp -280bp Reuters News 8.3% 3.9% 440bp 450bp Global Print 35.9% 34.6% 130bp 110bp Corporate costs n/a n/a n/a n/a Adjusted EBITDA margin 26.4% 32.5% -610bp -610bp (1) See "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. (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 5% (6% organic) to $689 million. * Recurring revenues grew 5% (93% of total, 6% organic), primarily due to strong performances from Practical Law, Elite, FindLaw and the Government business, as well as contributions from the company's Canadian, European and Latin American businesses. * Transactions revenues grew 4% (7% of total, 6% organic), primarily related to the Elite, Government, and Asia and Emerging Markets businesses. Adjusted EBITDA decreased 3% to $239 million. * The margin decreased to 34.5% from 37.5%, primarily due to higher performance bonus expense. Corporates Revenues increased 7% (all organic) to $361 million.
* Recurring revenues grew 7% (87% of total, all organic) driven by Practical Law, Indirect Tax, CLEAR and Legal software, as well as the company's businesses in Latin America. * Transactions revenues grew 4% (13% of total, all organic). Adjusted EBITDA decreased 10% to $95 million. * The margin decreased to 26.3% from 31.1%, primarily due to higher performance bonus expense. Tax & Accounting Professionals Revenues increased 9% (all organic) to $309 million. * Recurring revenues grew 9% (89% of total, all organic), driven by strong growth from Audit Solutions, Tax Compliance and the company's Latin America businesses. * Transactions revenues increased 10% (11% of total, all organic). Adjusted EBITDA increased 6% to $154 million. * The margin decreased to 49.8% from 51.1%, primarily due to higher performance bonus expense. 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 $182 million increased 12% (all organic), driven by growth in all businesses, including Reuters Events as it continues to recover from the negative impact from COVID-19 in 2020. Adjusted EBITDA increased 139% to $15 million, primarily due to higher revenues. Global Print Revenues decreased 4% to $170 million. Adjusted EBITDA was unchanged from the prior-year period at $61 million. * The margin increased to 35.9% from 34.6% due to year-over-year timing of expenses. Corporate Costs Corporate costs at the adjusted EBITDA level were $112 million and included $78 million of Change Program costs. Corporate costs were $37 million in the prior-year period. Additional information regarding the Change Program is provided below. Consolidated Financial Highlights - Year Ended December 31 Year Ended December 31, (Millions of U.S. dollars, except for adjusted EBITDA margin and EPS) (unaudited) IFRS Financial Measures(1) 2021 2020 Change Change at Constant Currency Revenues $6,348 $5,984 6% Operating profit $1,242 $1,929 -36% Diluted earnings per share (EPS) $11.50 $2.25 n/m Net cash provided by operating activities $1,773 $1,745 2% Non-IFRS Financial Measures(1) Revenues $6,348 $5,984 6% 5% Adjusted EBITDA $1,970 $1,975 0% -1% Adjusted EBITDA margin 31.0% 33.0% -200bp -190bp Adjusted EPS $1.95 $1.85 5% 5% Free cash flow $1,256 $1,330 -6% (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 "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 6% driven by 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 13% growth in transactions revenues. Global Print revenues declined. + Organic growth of 5% included an approximate 100bp benefit resulting from easier year-over-year comparisons due to the negative impact of COVID-19 on the business in 2020. * The company's "Big 3" segments, which collectively comprised 80% of total revenues, reported organic revenue growth of 6%. Operating profit declined 36%, primarily because the prior year included significant gains from the sale of an investment and from an amendment to a pension plan. * Adjusted EBITDA, which excludes the gains from the sale of the investment and the pension plan amendment among other items, was unchanged on a year-over-year basis as higher revenues were offset by higher costs, which included investments associated with the company's Change Program and higher performance bonus expense. The related margin decreased to 31.0% from 33.0% in the prior year. Adjusted EBITDA margin was negatively impacted by 290bp due to Change Program costs. Diluted EPS increased to $11.50 per share from $2.25 per share in the prior year due to the gain on the sale of Refinitiv to LSEG in January 2021. * Adjusted EPS, which excludes the gain on the sale of Refinitiv and other adjustments, increased to $1.95 per share from $1.85 per share in the prior year, primarily due to lower depreciation and software amortization and lower income tax expense. Net cash provided by operating activities increased as higher revenues more than offset higher tax payments and expenses, which included Change Program costs. * Free cash flow decreased by $74 million as higher cash flows from operating activities were more than offset by a prior-year benefit from the proceeds associated with the sale of real estate. Highlights by Customer Segment - Year Ended December 31 (Millions of U.S. dollars, except for adjusted EBITDA margins) (unaudited) Year Ended Change December 31, 2021 2020 Total Constant Organic(1) Currency(1) (2) Revenues Legal Professionals $2,712 $2,535 7% 6% 6% Corporates 1,449 1,367 6% 5% 5% Tax & Accounting 906 836 8% 9% 9% Professionals "Big 3" Segments Combined(1) 5,067 4,738 7% 6% 6% Reuters News 674 628 7% 7% 7% Global Print 609 620 -2% -3% -3% Eliminations/Rounding (2) (2) Revenues $6,348 $5,984 6% 5% 5% Adjusted EBITDA(1) Legal Professionals $1,091 $1,001 9% 7% Corporates 502 460 9% 9% Tax & Accounting 373 330 13% 13% Professionals "Big 3" Segments Combined(1) 1,966 1,791 10% 9% Reuters News 103 73 40% 51% Global Print 226 242 -7% -8% Corporate costs (325) (131) n/a n/a Adjusted EBITDA $1,970 $1,975 0% -1% Adjusted EBITDA Margin(1) Legal Professionals 40.2% 39.5% 70bp 50bp Corporates 34.6% 33.7% 90bp 100bp Tax & Accounting 41.1% 39.5% 160bp 170bp Professionals "Big 3" Segments Combined(1) 38.8% 37.8% 100bp 90bp Reuters News 15.2% 11.7% 350bp 500bp Global Print 37.1% 39.0% -190bp -210bp Corporate costs n/a n/a n/a n/a Adjusted EBITDA margin 31.0% 33.0% -200bp -190bp (1) See "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. (2) Computed for revenue growth only. n/a: not applicable Thomson Reuters Change Program and Outlook In February 2021, the company announced a two-year Change Program to transition from a holding company to an operating company, and from a content provider to a content-driven technology company. The company is 12 months into the program, which is expected to be largely complete by the end of 2022. The program is projected to require an investment of approximately $600 million during that time of which $295 million was invested in 2021. The company's updated outlook for 2022 and 2023 incorporates the forecasted impacts associated with the Change Program, assumes constant currency rates, and excludes the impact of any future acquisitions or dispositions that may occur during those periods. Thomson Reuters believes that this type of guidance provides useful insight into the performance of its businesses. The company expects its first-quarter 2022 revenue growth rate and adjusted EBITDA margin will be comparable to its full-year 2022 outlook targets. While the company's full-year 2021 performance provides it with increasing confidence about its outlook, the global economy has recently experienced substantial disruption due to concerns regarding resurgences and new strains of COVID-19, measures intended to mitigate the pandemic's impact, and other events and macroeconomic factors. Any worsening of the global economic or business environment could impact the company's ability to achieve its outlook. Reported Full-Year 2021 and Updated Full-Year 2022 - 2023 Outlook Total Thomson Reuters FY 2021 2/23/21 2/23/21 2/8/22 2/8/22
Reported FY 2022 FY 2023 FY 2022 FY 2023 Outlook Outlook Outlook Outlook Total Revenue Growth 6.1% 4.0% - 5.0% 5.0% - 6.0% 5% 5.5% - 6.0% Organic Revenue Growth 5.2% 4.0% - 5.0% 5.0% - 6.0% 5% 5.5% - 6.0% (1) Adjusted EBITDA Margin 31.0% 34% - 35% 38% - 40% 35% 39% - 40% (1) Corporate Costs $325 $245 - $280 $110 - $120 $280 - $330 Unchanged Core Corporate million million million million Unchanged Costs $142 $120 - $130 $110 - $120 Unchanged Unchanged Change Program million million million $160 - $200 Opex $183 $125 - $150 $0 million million million Free Cash Flow(1) $1.3 $1.2 - $1.3 $1.8 - $2.0 $1.3 $1.9 - billion billion billion billion $2.0 billion Accrued Capex as % of 8.5% 7.5% - 8.0% 6.0% - 6.5% Unchanged Unchanged Revenue(1) $112 $75 - $100 $0 $100 - $140 Unchanged Change Program million million million Accrued Capex Depreciation & $651 $620 - $645 $580 - $605 Unchanged Unchanged Amortization of million million million Computer Software Interest Expense (P&L) $196 $190 - $210 $190 - $210 Unchanged Unchanged million million million Effective Tax Rate on 13.9% n/a n/a 19% - 21% n/a Adjusted Earnings(1) "Big 3"(1) FY 2021 2/23/21 2/23/21 2/8/22 2/8/22 Reported FY 2022 FY 2023 FY 2022 FY 2023 Outlook Outlook Outlook Outlook Total Revenue Growth 6.9% 5.5% - 6.5% 6.0% - 7.0% 6.0% - 6.5% 6.5% - 7.0% Organic Revenue Growth 6.2% 5.5% - 6.5% 6.0% - 7.0% 6.0% - 6.5% 6.5% - 7.0% Adjusted EBITDA Margin 38.8% 41% - 42% 43% - 45% 42% 44% - 45% (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. The information in this section is forward-looking. Actual results, which will include the impact of currency and future acquisitions and dispositions completed during 2022 and 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." Dividends and Share Repurchases The company announced today that its Board of Directors approved a 10% or $0.16 per share annualized increase in the dividend to $1.78 per common share, representing the 29th consecutive year of dividend increases. A quarterly dividend of $0.445 per share is payable on March 15, 2022 to common shareholders of record as of February 24, 2022. In the fourth quarter of 2021, the company completed a previously announced plan to buy back up to $1.2 billion of its common shares. This buyback program was in addition to the $200 million repurchase program that was completed earlier in 2021. As of February 7, 2022, Thomson Reuters had approximately 486.2 million common shares outstanding. In 2021, Thomson Reuters returned a total of $2.2 billion of cash to shareholders through dividends and share repurchases. London Stock Exchange Group (LSEG) Ownership Interest In January 2021, Thomson Reuters and private equity funds affiliated with Blackstone sold Refinitiv to LSEG in an all-share transaction. Thomson Reuters indirectly owns LSEG shares through an entity that it jointly owns with Blackstone's consortium and a group of current LSEG and former Refinitiv senior management. As of February 7, 2022, Thomson Reuters indirectly owned approximately 72.4 million LSEG shares which had a market value of approximately $7.0 billion based on LSEG's closing share price on that day. The company received $51 million of dividends from its LSEG investment in June 2021 and an additional $24 million in October 2021. In March 2021, as permitted under a lock-up exception, Thomson Reuters sold approximately 10.1 million LSEG shares for pre-tax net proceeds of $994 million. Over the course of 2021, Thomson Reuters paid $223 million of tax on the sale of these shares and used the after-tax proceeds to pay $627 million of tax that became payable when the Refinitiv sale closed. In 2021, the company paid $850 million of taxes related to these transactions. Thomson Reuters Thomson Reuters is a leading provider of business information services. Our products include highly specialized information-enabled software and tools for legal, tax, accounting and compliance professionals combined with the world's most global news service - Reuters. For more information on Thomson Reuters, visit tr.com and for the latest world news, reuters.com. NON-IFRS FINANCIAL MEASURES Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). This news release includes certain non-IFRS financial measures, which include ratios that incorporate one or more non-IFRS financial measures, such as adjusted EBITDA and the related margin (other than at the customer segment level), free cash flow, 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". 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 2022 and 2023 impacts of changes in foreign exchange rates which impact (i) the translation of its results reported at average foreign currency rates for the year, and (ii) other finance income or expense related to intercompany financing arrangements. Additionally, the company cannot reasonably predict (i) its share of post-tax earnings (losses) in equity method investments, which is subject to changes in the stock price of LSEG or (ii) the occurrence or amount of other operating gains and losses that generally arise from business transactions that the company does not currently anticipate. ROUNDING Other than EPS, the company reports its results in millions of U.S. dollars, but computes percentage changes and margins using whole dollars to be more precise. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS Certain statements in this news release, including, but not limited to, statements in Mr. Hasker's comments and the "Thomson Reuters Change Program and Outlook" section, 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 16-30 in the "Risk Factors" section of the company's 2020 annual report. A "Risk Factors" section will also be included in the company's 2021 annual report, which the company plans to file in March. 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. For a discussion of material assumptions and material risks related to the company's 2022 and 2023 updated outlook, please see pages 22-23 of the company's third-quarter management's discussion and analysis (MD&A) for the period ended September 30, 2021. In addition to those material assumptions and material risks, material assumptions related to the company's updated 2022 and 2023 outlook include the following updates: (i) the company's revenue outlook now assumes that there will be improved global economic conditions throughout 2022 and 2023, despite periods of volatility due to disruption caused by COVID-19, measures intended to mitigate the pandemic's impact, and other events and macroeconomic factors; (ii) the company's adjusted EBITDA margin outlook assumes Change Program operating expenditures between $160 million and $200 million in 2022; (iii) the company's free cash flow outlook now assumes accrued capital expenditures between 7.5% and 8% of revenues in 2022 and between 6% and 6.5% of revenues in 2023; and (iv) the company's effective tax rate on adjusted earnings outlook now assumes (a) the mix of taxing jurisdictions where the company recognized pre-tax profit or losses in 2021 does not significantly change; (b) there will be minimal changes in tax laws and treaties within the jurisdictions where the company operates; (c) the imposition of minimum taxes in various jurisdictions; (d) no significant benefits from the finalization of prior tax years; (e) depreciation and amortization of computer software between $620 million and $645 million in 2022; and (f) interest expense between $190 million and $210 million in 2022. Material assumptions and material risks related to the company's outlook will also be included in the company's 2021 annual report, which the company plans to file in March. 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 INVESTORS Melissa Cassar Frank J. Golden Head of Commercial Communications & Corporate Head of Investor Relations Affairs +1 332 219 1111 +1 437 388 3619 frank.golden@tr.com melissa.cassar@tr.com Thomson Reuters will webcast a discussion of its fourth-quarter and full-year 2021 results and its two-year business outlook today beginning at 9:00 a.m. Eastern Standard Time (EST). 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 Year Ended December 31, December 31, 2021 2020 2021 2020 CONTINUING OPERATIONS Revenues $1,710 $1,616 $6,348 $5,984 Operating expenses (1,256) (1,098) (4,370) (3,999) Depreciation (49) (40) (177) (184) Amortization of computer (118) (123) (474) (485) software Amortization of other (29) (31) (119) (123) identifiable intangible assets Other operating (losses) (1) 632 34 736 gains, net Operating profit 257 956 1,242 1,929 Finance costs, net: Net interest expense (50) (49) (196) (195) Other finance (costs) (22) (6) 8 30 income Income before tax and equity 185 901 1,054 1,764 method investments Share of post-tax (losses) (477) (159) 6,240 (544) earnings in equity method investments Tax benefit (expense) 115 (155) (1,607) (71) (Loss) earnings from (177) 587 5,687 1,149 continuing operations Earnings (loss) from 2 (25) 2 (27) discontinued operations, net of tax Net (loss) earnings $(175) $562 $5,689 $1,122 (Loss) earnings attributable $(175) $562 $5,689 $1,122 to common shareholders Earnings (loss) per share: Basic (loss) earnings per share: From continuing operations $(0.36) $1.18 $11.52 $2.31 From discontinued - (0.05) 0.01 (0.06) operations Basic (loss) earnings per $(0.36) $1.13 $11.53 $2.25 share Diluted (loss) earnings per share: From continuing operations $(0.36) $1.18 $11.50 $2.30 From discontinued - (0.05) - (0.05) operations Diluted (loss) earnings per $(0.36) $1.13 $11.50 $2.25 share Basic weighted-average common 487,297,738 497,372,688 493,444,031 496,722,292 shares Diluted weighted-average 487,297,738 498,809,560 494,504,504 498,032,006 common shares Thomson Reuters Corporation Consolidated Statement of Financial Position (millions of U.S. dollars) (unaudited) December 31, December 31, 2021 2020 Assets Cash and cash equivalents $778 $1,787 Trade and other receivables 1,057 1,151 Other financial assets 108 612 Prepaid expenses and other current assets 510 425 Current assets 2,453 3,975 Property and equipment, net 502 545 Computer software, net 822 830 Other identifiable intangible assets, net 3,331 3,427 Goodwill 5,940 5,976 Equity method investments 6,736 1,136 Other non-current assets 1,226 788 Deferred tax 1,139 1,204 Total assets $22,149 $17,881 Liabilities and equity Liabilities Payables, accruals and provisions $1,363 $1,159 Current tax liabilities 169 251 Deferred revenue 874 866 Other financial liabilities 175 376 Current liabilities 2,581 2,652 Long-term indebtedness 3,786 3,772 Provisions and other non-current liabilities 943 1,083 Deferred tax 1,005 394 Total liabilities 8,315 7,901 Equity Capital 5,496 5,458 Retained earnings 9,149 5,211 Accumulated other comprehensive loss (811) (689) Total equity 13,834 9,980 Total liabilities and equity $22,149 $17,881 Thomson Reuters Corporation Consolidated Statement of Cash Flow (millions of U.S. dollars) (unaudited) Three Months Year Ended Ended December 31, December 31, 2021 2020 2021 2020 Cash provided by (used in): Operating activities (Loss) earnings from continuing operations $(177) $587 $5,687 $1,149 Adjustments for: Depreciation 49 40 177 184 Amortization of computer software 118 123 474 485 Amortization of other identifiable intangible 29 31 119 123 assets Share of post-tax losses (earnings) in equity 477 159 (6,240) 544 method investments
Net gains on disposals of businesses and - (472) (5) (471) investments Deferred tax (108) (41) 662 (231) Other 74 (106) 135 (123) Changes in working capital and other items (69) 249 832 102 Operating cash flows from continuing operations 393 570 1,841 1,762 Operating cash flows from discontinued 4 (4) (68) (17) operations Net cash provided by operating activities 397 566 1,773 1,745 Investing activities Acquisitions, net of cash acquired (13) (2) (18) (167) Proceeds from disposals of businesses and - 366 28 367 investments, net of taxes paid Dividend from sale of LSEG shares - - 994 - Capital expenditures (123) (100) (487) (504) Proceeds from disposals of property and - - - 162 equipment Other investing activities 25 2 81 4 Taxes paid on sale of Refinitiv and LSEG shares (188) - (850) - Investing cash flows from continuing operations (299) 266 (252) (138) Investing cash flows from discontinued - - (252) - operations Net cash (used in) provided by investing (299) 266 (504) (138) activities Financing activities Proceeds from debt - - - 2,019 Repayments of debt - - - (1,645) Net repayments under short-term loan facilities - - - (2) Payments of lease principal (44) (19) (109) (75) Repurchases of common shares (597) - (1,400) (200) Dividends paid on preference shares - - (2) (2) Dividends paid on common shares (191) (183) (773) (730) Other financing activities 3 1 11 (9) Net cash used in financing activities (829) (201) (2,273) (644) (Decrease) increase in cash and bank overdrafts (731) 631 (1,004) 963 Translation adjustments (2) 4 (5) (1) Cash and bank overdrafts at beginning of period 1,511 1,152 1,787 825 Cash and bank overdrafts at end of period $778 $1,787 $778 $1,787 Cash and bank overdrafts at end of period comprised of: Cash and cash equivalents $778 $1,787 $778 $1,787 Thomson Reuters Corporation Reconciliation of (Loss) Earnings from Continuing Operations to Adjusted EBITDA (1) (millions of U.S. dollars, except for margins) (unaudited) Three Months Year Ended Ended December 31, December 31, 2021 2020 2021 2020 (Loss) earnings from continuing operations $(177) $587 $5,687 $1,149 Adjustments to remove: Tax (benefit) expense (115) 155 1,607 71 Other finance costs (income) 22 6 (8) (30) Net interest expense 50 49 196 195 Amortization of other identifiable intangible 29 31 119 123 assets Amortization of computer software 118 123 474 485 Depreciation 49 40 177 184 EBITDA $(24) $991 $8,252 $2,177 Adjustments to remove: Share of post-tax losses (earnings) in equity 477 159 (6,240) 544 method investments Other operating losses (gains), net 1 (632) (34) (736) Fair value adjustments* (2) 7 (8) (10) Adjusted EBITDA(1) $452 $525 $1,970 $1,975 Adjusted EBITDA margin(1) 26.4% 32.5% 31.0% 33.0% * Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business. Thomson Reuters Corporation Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (1) (millions of U.S. dollars) (unaudited) Three Months Year Ended Ended December 31, December 31, 2021 2020 2021 2020 Net cash provided by operating activities $397 $566 $1,773 $1,745 Capital expenditures (123) (100) (487) (504) Proceeds from disposals of property and equipment - - - 162 Other investing activities 25 2 81 4 Payments of lease principal (44) (19) (109) (75) Dividends paid on preference shares - - (2) (2) Free cash flow(1) $255 $449 $1,256 $1,330 Thomson Reuters Corporation Reconciliation of Capital Expenditures to Accrued Capital Expenditures(1) (millions of U.S. dollars) (unaudited) Year Ended December 31, 2021 2020 Capital expenditures $487 $504 Remove: IFRS adjustment to cash basis 54 (37) Accrued capital expenditures (1) $541 $467 Accrued capital expenditures as a percentage of revenues(1) 8.5% 7.8% (1) Refer to page 21 for additional information on non-IFRS financial measures. Thomson Reuters Corporation Reconciliation of Net (Loss) Earnings to Adjusted Earnings(1) Reconciliation of Total Change in Adjusted EPS(1) to Change in Constant Currency(1) (millions of U.S. dollars, except for share and per share data) (unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 Change 2021 2020 Change Net (loss) earnings $ $562 $5,689 $1,122 (175) Adjustments to remove: Fair value adjustments* (2) 7 (8) (10) Amortization of other identifiable 29 31 119 123 intangible assets Other operating losses (gains), net 1 (632) (34) (736) Other finance costs (income) 22 6 (8) (30) Share of post-tax losses (earnings) 477 159 (6,240) 544 in equity method investments Tax on above items(1) (141) 119 1,475 19 Tax items impacting comparability(1) (9) (29) (24) (136) (Earnings) loss from discontinued (2) 25 (2) 27 operations, net of tax Interim period effective tax rate 10 21 - - normalization(1) Dividends declared on preference - - (2) (2) shares Adjusted earnings(1) $210 $269 $965 $921 Adjusted EPS(1) $0.43 $0.54 -20% $1.95 $1.85 5% Foreign currency 0% 1% Constant currency -20% 5% Diluted weighted-average common 488.6 498.8 494.5 498.0 shares (millions)** * Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business. ** Because Thomson Reuters reported a net loss for continuing operations under IFRS for the three months ended December 31, 2021, the weighted-average number of common shares used for basic and diluted loss per share is the same for all per-share calculations in the period, as the effect of stock options and other equity incentive awards would reduce the loss per share, and therefore be anti-dilutive. Since the company's non-IFRS measure "adjusted earnings" is a profit, potential common shares are included, as they lower adjusted EPS and are therefore dilutive. The following table reconciles IFRS and non-IFRS common share information: (weighted-average common shares) Three Months Ended December 31, 2021 IFRS: Basic and Diluted 487,297,738 Effect of stock options and other 1,291,196 equity incentive awards Non-IFRS Diluted 488,588,934
(1) Refer to page 21 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) Three Months Ended December 31, Change 2021 2020 Total Foreign SUBTOTAL Acquisitions/ Organic Currency Constant (Divestitures) Currency Total Revenues Legal Professionals $689 $653 5% 0% 5% 0% 6% Corporates 361 338 7% 0% 7% 0% 7% Tax & Accounting 309 285 9% -1% 9% 0% 9% Professionals "Big 3" Segments Combined(1) 1,359 1,276 6% 0% 7% 0% 7% Reuters News 182 164 11% -1% 12% 0% 12% Global Print 170 177 -4% 0% -4% 0% -4% Eliminations/Rounding (1) (1) Revenues $1,710 $1,616 6% 0% 6% 0% 6% Recurring Revenues Legal Professionals $642 $608 6% 0% 5% 0% 6% Corporates 314 293 7% 0% 7% 0% 7% Tax & Accounting 276 255 9% 0% 9% 0% 9% Professionals "Big 3" Segments Combined(1) 1,232 1,156 7% 0% 7% 0% 7% Reuters News 145 142 2% -1% 3% 0% 3% Total Recurring Revenues $1,377 $1,298 6% 0% 6% 0% 6% Transactions Revenues Legal Professionals $47 $45 4% 0% 4% -2% 6% Corporates 47 45 4% 0% 4% 0% 4% Tax & Accounting 33 30 9% -1% 10% 0% 10% Professionals "Big 3" Segments Combined(1) 127 120 5% 0% 6% -1% 6% Reuters News 37 22 66% 2% 64% 0% 64% Total Transactions Revenues $164 $142 15% 0% 15% -1% 16% 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 21 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) Year Ended December 31, Change 2021 2020 Total SUBTOTAL Foreign Constant Acquisitions/ Currency Currency (Divestitures) Organic Total Revenues Legal Professionals $2,712 $2,535 7% 1% 6% 0% 6% Corporates 1,449 1,367 6% 1% 5% 0% 5% Tax & Accounting 906 836 8% 0% 9% 0% 9% Professionals "Big 3" Segments Combined(1) 5,067 4,738 7% 1% 6% 0% 6% Reuters News 674 628 7% 1% 7% 0% 7% Global Print 609 620 -2% 1% -3% 0% -3% Eliminations/Rounding (2) (2) Revenues $6,348 $5,984 6% 1% 5% 0% 5% Recurring Revenues Legal Professionals $2,523 $2,367 7% 1% 6% 0% 5% Corporates 1,218 1,143 7% 1% 6% 0% 6% Tax & Accounting 733 682 8% 0% 8% 0% 8% Professionals "Big 3" Segments Combined(1) 4,474 4,192 7% 1% 6% 0% 6% Reuters News 576 566 2% 1% 1% 0% 1% Total Recurring Revenues $5,050 $4,758 6% 1% 5% 0% 5% Transactions Revenues Legal Professionals $189 $168 13% 2% 11% -1% 12% Corporates 231 224 3% 0% 3% 0% 3% Tax & Accounting 173 154 12% 0% 12% 0% 12% Professionals "Big 3" Segments Combined(1) 593 546 9% 1% 8% 0% 8% Reuters News 98 62 57% 2% 55% 0% 55% Total Transactions Revenues $691 $608 14% 1% 13% 0% 13% 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 21 for additional information on non-IFRS financial measures. Thomson Reuters Corporation Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant Currency Basis(1) (millions of U.S. dollars) (unaudited) Three Months Ended December 31, Change 2021 2020 Total Foreign Constant Currency Currency Adjusted EBITDA(1) Legal Professionals $239 $245 -3% 0% -2% Corporates 95 105 -10% 0% -10% Tax & Accounting Professionals 154 145 6% -1% 7%
"Big 3" Segments Combined(1) 488 495 -2% 0% -1% Reuters News 15 6 139% 32% 107% Global Print 61 61 0% 1% -1% Corporate costs (112) (37) n/a n/a n/a Adjusted EBITDA $452 $525 -14% 0% -14% Adjusted EBITDA Margin(1) Legal Professionals 34.5% 37.5% -300bp -30bp -270bp Corporates 26.3% 31.1% -480bp 0bp -480bp Tax & Accounting Professionals 49.8% 51.1% -130bp -10bp -120bp "Big 3" Segments Combined(1) 35.8% 38.8% -300bp -20bp -280bp Reuters News 8.3% 3.9% 440bp -10bp 450bp Global Print 35.9% 34.6% 130bp 20bp 110bp Corporate costs n/a n/a n/a n/a n/a Adjusted EBITDA margin 26.4% 32.5% -610bp 0bp -610bp 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 21 for additional information on non-IFRS financial measures. Thomson Reuters Corporation Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant Currency Basis(1) (millions of U.S. dollars) (unaudited) Year Ended December 31, Change 2021 2020 Total Foreign Constant Currency Currency Adjusted EBITDA(1) Legal Professionals $1,091 $1,001 9% 2% 7% Corporates 502 460 9% 0% 9% Tax & Accounting Professionals 373 330 13% 0% 13% "Big 3" Segments Combined(1) 1,966 1,791 10% 1% 9% Reuters News 103 73 40% -11% 51% Global Print 226 242 -7% 2% -8% Corporate costs (325) (131) n/a n/a n/a Adjusted EBITDA $1,970 $1,975 0% 0% -1% Adjusted EBITDA Margin(1) Legal Professionals 40.2% 39.5% 70bp 20bp 50bp Corporates 34.6% 33.7% 90bp -10bp 100bp Tax & Accounting Professionals 41.1% 39.5% 160bp -10bp 170bp "Big 3" Segments Combined(1) 38.8% 37.8% 100bp 10bp 90bp Reuters News 15.2% 11.7% 350bp -150bp 500bp Global Print 37.1% 39.0% -190bp 20bp -210bp Corporate costs n/a n/a n/a n/a n/a Adjusted EBITDA margin 31.0% 33.0% -200bp -10bp -190bp 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 21 for additional information on non-IFRS financial measures. Non-IFRS Definition Why Useful to the Company and Financial Investors Measures Segment Earnings or losses from continuing Provides a consistent basis to adjusted operations before tax expense or evaluate operating EBITDA, benefit, net interest expense, profitability and performance adjusted other finance costs or income, trends by excluding items that EBITDA and depreciation, amortization of the company does not consider adjusted software and other identifiable to be controllable activities EBITDA intangible assets, Thomson Reuters for this purpose. margin share of post-tax earnings or losses in equity method Also, represents a measure investments, other operating gains commonly reported and widely and losses, certain asset used by investors as a impairment charges, fair value valuation metric, as well as to adjustments and corporate related assess a company's ability to items. incur and service debt. Consolidated adjusted EBITDA is comprised of adjusted EBITDA of the business segments and corporate costs. Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage of revenues. Adjusted Net earnings or loss including Provides a more comparable earnings and dividends declared on preference basis to analyze earnings. adjusted shares but excluding the post-tax earnings per impacts of fair value adjustments, These measures are commonly share amortization of other identifiable used by shareholders to measure intangible assets, other operating the company's performance. 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. Effective Adjusted tax expense divided by Provides a basis to analyze the tax rate on pre-tax adjusted earnings. effective tax rate associated adjusted Adjusted tax expense is computed with adjusted earnings. earnings as Income tax (benefit) expense plus or minus the income tax impacts of all items impacting adjusted earnings (as described Because the geographical mix of above), and other tax items pre-tax profits and losses in affecting comparability. interim periods may be different from that for the In interim periods, we also make full year, our effective tax an adjustment to reflect income rate computed in accordance taxes based on the estimated with IFRS may be more volatile full-year effective tax rate. by quarter. Therefore, we Earnings or losses for interim believe that using the expected periods under IFRS reflect income full-year effective tax rate taxes based on the estimated provides more comparability effective tax rates of each of the among interim periods. 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. Free cash Net cash provided by operating Helps assess the company's flow activities, proceeds from ability, over the long term, to disposals of property and create value for its equipment, and other investing shareholders as it represents activities less capital cash available to repay debt,
expenditures, payments of lease pay common dividends and fund principal and dividends paid on share repurchases and the company's preference shares. acquisitions. Changes The changes in revenues, adjusted Provides better comparability before the EBITDA and the related margins, of business trends from period impact of and adjusted earnings per share to period. foreign before currency (at constant currency currency or excluding the effects "constant of currency) are determined by currency" converting the current and prior-year period's local currency equivalent using the same exchange rates. Organic Represents changes in revenues of Provides further insight into revenue the company's existing businesses the performance of its existing growth at constant currency. The metric businesses by excluding excludes the distortive impacts of distortive impacts and serves acquisitions and dispositions from as a better measure of the not owning the business in both company's ability to grow its comparable periods. business over the long term. Accrued Accrued capital expenditures Reflects the basis on which the capital divided by revenues, where accrued company manages capital expenditures capital expenditures include expenditures for internal as a amounts that remain unpaid at the budgeting purposes. percentage end of the reporting period. of revenues Prior to December 31, 2021, the company used capital expenditures paid in this calculation, from its consolidated statement of cash flow, as measured under IFRS. The prior period has been revised to reflect the current methodology. "Big 3" The combined Legal Professionals, Information for the "Big 3" segments Corporates and Tax & Accounting segments comprise 80% of Professionals segments. All revenues and represent the core measures reported for the "Big 3" of the company's business segments are non-IFRS financial information service product measures. offerings. Please refer to reconciliations for most directly comparable IFRS measures. END
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