May 3, 2022

TORONTO, May 3, 2022 – Thomson Reuters (TSX/NYSE: TRI) today reported results for the first quarter ended March 31, 2022:           

• Strong revenue and sales growth continued in the first quarter
• Total company revenue up 6% / organic revenue up 7%
• Organic revenue up 7% for the “Big 3” (Legal Professionals, Corporates and Tax & Accounting Professionals)
• Raised full-year 2022 revenue guidance
• Total company revenue forecast increased to approximately 5.5% from approximately 5.0%
• “Big 3” segments revenue forecast increased to approximately 6.5% from a range of 6.0% - 6.5%
• No other changes to full-year 2022 outlook, reaffirmed full-year 2023 outlook
• Change Program on track - $305 million run-rate operating expense savings at quarter-end

“The momentum we saw throughout 2021 continued to build in the first quarter of 2022, with both sales and revenue exceeding our expectations. The strong start to the year gives us confidence we are on the right path to achieve our 2022 and 2023 targets,” said Steve Hasker, President and CEO of Thomson Reuters.

Mr. Hasker added, “Our businesses are benefiting from significant prevailing tailwinds driven by a step change in the complexity of compliance in our legal, tax, and risk-related markets. The resulting need for trusted, accurate and actionable content and technology plays to our strengths. Against this backdrop, we will continue to invest in our businesses, our employees and our customers’ success as we work to translate our current momentum into sustainable long-term value creation.”

Consolidated Financial Highlights - Three Months Ended March 31

Revenues increased 6%, driven by growth across four of the company’s five business segments. Foreign currency had a 1% negative impact on revenues.

• Organic revenues increased 7%, driven by 7% growth in recurring revenues (78% of total revenues) as well as 8% growth in transactions revenues. Global Print revenues were flat compared to the prior-year period. 
• Organic growth of 7% included an approximately 100bp benefit resulting primarily from transactional revenue that is unlikely to recur at this level and, to a lesser extent, timing. The company expects organic growth to normalize in the remainder of the year and be in line with full-year guidance.
• The company’s “Big 3” segments (Legal Professionals, Corporates and Tax & Accounting Professionals) reported organic revenue growth of 7% and collectively comprised 81% of total revenues.

Operating profit increased 7% as higher revenues more than offset higher costs, which included investments associated with the company’s Change Program. 

• Adjusted EBITDA increased 7% due to the same factors as operating profit. The related margin increased to 35.8% from 35.3% in the prior-year period. Investments in the Change Program negatively impacted the first-quarter adjusted EBITDA margin by 210bp.

Diluted earnings per share (EPS) was $2.06 per share compared to $10.13 per share in the prior-year period. The current period included a benefit from an increase in the value of the company’s investment in London Stock Exchange Group (LSEG), while the prior-year period included a gain of approximately $8.1 billion on the sale of Refinitiv to LSEG.

• Adjusted EPS, which excludes the change in value of the company’s LSEG investment, the gain on the sale of Refinitiv and other adjustments, increased to $0.66 per share from $0.58 per share in the prior-year period, primarily due to higher adjusted EBITDA.

Net cash provided by operating activities decreased due to higher payments associated with the Change Program as well as higher annual incentive plan bonuses.

• Free cash flow decreased $153 million due to lower cash flows from operating activities and higher capital expenditures associated with the Change Program.

Highlights by Customer Segment - Three Months Ended March 31

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 $698 million.

• Recurring revenues grew 6% (94% of total, all organic), primarily due to strong performances from the Government business, Westlaw, Practical Law, FindLaw and the segment’s business in Canada and Asia & Emerging Markets.
• Transactions revenues decreased 3% (6% of total, decreased 2% organic).

Adjusted EBITDA increased 9% to $305 million.

• The margin increased to 43.7% from 41.8%, primarily due to higher revenues and Change Program savings.

Corporates

Revenues increased 8% (all organic) to $411 million. Revenues benefited from transactional revenue strength that is unlikely to recur at first-quarter levels.

• Recurring revenues grew 8% (77% of total, all organic) driven by Practical Law, CLEAR and Indirect Tax.
• Transactions revenues grew 8% (23% of total, all organic), driven by Confirmation as well as the company’s businesses in Latin America and Asia & Emerging Markets.  

Adjusted EBITDA increased 8% to $157 million.

• The margin increased to 38.1% from 38.0%, as higher expenses largely offset higher revenues.

Tax & Accounting Professionals

Revenues increased 11% (all organic) to $253 million. Revenues benefited from a change in the year-over-year timing of the U.S. federal tax filing deadlines for individuals, which returned to April in 2022 compared to the extended deadline in May 2021. This benefited organic revenues by 150bp in the first quarter of 2022 and will reverse in the second quarter of 2022.

• Recurring revenues grew 12% (72% of total, all organic), driven by strong growth from UltraTax and the company's Latin America businesses.
• Transactions revenues increased 10% (28% of total, all organic), primarily due to the year-over-year timing of the U.S. federal tax filing deadlines for individuals and audit products.

Adjusted EBITDA increased 23% to $122 million.

• The margin increased to 48.3% from 43.8%, primarily due to higher revenues and Change Program savings.

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 $176 million increased 9% (all organic), primarily driven by the Professionals business and the increase in the company’s LSEG news agreement.

Adjusted EBITDA increased 31% to $37 million, primarily due to higher revenues.

Global Print

Revenues were flat compared to the prior-year period, which was better than the decline that the company expected due to higher third-party revenues for printing services and the timing of new sales.

Adjusted EBITDA decreased 8% to $53 million.

• The margin decreased to 37.0% from 39.9% due to the dilutive effect of third-party print revenue

Corporate Costs

Corporate costs at the adjusted EBITDA level were $74 million and included $34 million of Change Program costs. Corporate costs were $50 million in the prior-year period and included $11 million of Change Program costs. Additional information regarding the Change Program is provided below.

Change Program

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 15 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 $357 million has been invested as of March 31, 2022. The company continues to anticipate that Change Program spending will be approximately 60% operating expenses and 40% capital expenditures.

2022 and 2023 Outlook

The company’s updated outlook for 2022 and reaffirmed outlook for 2023 (which is reflected in the table below) 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 second-quarter 2022 revenue growth rate will be comparable to its full-year 2022 outlook targets and second-quarter 2022 adjusted EBITDA margin to be approximately 200bp below its full-year 2022 outlook targets.

While the company’s first-quarter 2022 performance provides it with increasing confidence about its outlook, the global economy has recently experienced substantial disruption due to concerns regarding economic effects associated with the pandemic, ongoing geopolitical risks 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.

Updated Full-Year 2022 Outlook

(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.

Reported Full-Year 2021 and Updated Full-Year 2022 – 2023 Outlook

(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

In February 2022, the company announced a 10% or $0.16 per share annualized increase in the dividend to $1.78 per common share, representing the 29^th consecutive year of dividend increases. A quarterly dividend of $0.445 per share is payable on June 15, 2022 to common shareholders of record as of May 26, 2022.

The company did not repurchase any of its shares in the first quarter of 2022.

As of May 2, 2022, Thomson Reuters had approximately [487.1] million common shares outstanding.

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 May 2, 2022, Thomson Reuters indirectly owned approximately 72.4 million LSEG shares which had a market value of approximately $7.2 billion based on LSEG’s closing share price on that day.

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 and the effective tax rate on adjusted EPS, accrued capital expenditures expressed as a percentage of revenues, selected measures excluding the impact of foreign currency, changes in revenues computed on an organic basis as well as all financial measures for the “Big 3”. 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 and foreign exchange contracts. 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.

REVISION TO PRIOR-YEAR SEGMENT RESULTS

In the first quarter of 2022, the company made two changes to its segment reporting to reflect how it currently manages its businesses. The changes (i) reflect the transfer of certain revenues from its Corporates business to its Tax & Accounting Professionals business where they are better aligned; and (ii) record intercompany revenue in Reuters News for content-related services that it provides to Legal Professionals, Corporates and Tax & Accounting Professionals. Previously, these services had been reported as a transfer of expense from Reuters News to these businesses. These changes impact the financial results of the company’s segments, but do not change the company’s consolidated financial results. The table below summarizes the changes to the company’s first-quarter 2021 results.

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 "Change Program,” “2022 and 2023 Outlook" and “LSEG Ownership Interest” sections, 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 17-30 in the “Risk Factors” section of the company’s 2021 annual report. These and other risk factors are discussed in materials that Thomson Reuters from time to time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission (SEC). Thomson Reuters annual and quarterly reports are also available in the “Investor Relations” section of tr.com.

The company's business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are appropriate under the circumstances. Material assumptions and material risks may cause actual performance to differ from the company’s expectations underlying its business outlook. For a discussion of material assumptions and material risks related to the company’s 2022 and 2023 outlook, please see pages 62-63 of the company’s 2021 annual report. Material assumptions and material risks related to the company’s outlook will also be included in the company’s first-quarter management’s discussion and analysis for the period ended March 31, 2022, which is expected to be filed shortly. 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 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
Melissa Cassar
Head of Commercial Communications & Corporate Affairs
+1 437 388 3619
melissa.cassar@tr.com

INVESTORS
Gary Bisbee
Head of Investor Relations
+1 646 540 3249
gary.bisbee@tr.com

Thomson Reuters will webcast a discussion of its first-quarter 2022 results and its business outlook today beginning at 9:00 a.m. Eastern Daylight Time (EDT). You can access the webcast by visiting ir.tr.com. An archive of the webcast will be available following the presentation.